Sign-On Bonus Used to Repay Undergrad Loans

I received a 10k sign on bonus from a consulting firm I will be starting at in the Fall. They already took out taxes, so its like $6,xxx. Can I ask the company to take this un-deposited check back and have them pay $10k directly to my loan company (with whom I have more than $10k in loans)? That way I may be able to save about $4k in taxes. Any thoughts on this?

9 Comments
 
trazer985UK student debts are taken out of Pretax earnings, no idea why anywhere would be any different.
I believe here in the US you must pay them in post-tax dollars but then can claim a deduction on your taxes when you file up to a certain amount.
 

There's some conflicting info on this thread.

I have no idea about the U.K., but student loan repayments in the U.S. are always made with after-tax dollars. I had about $9k in loans when I graduated. The only thing deductible is the interest expense. At the end of the year you will receive a tax form, 1098-T I think, from your loan institution. There are certain credits available that you could look into come tax time.

 
kingtutThere's some conflicting info on this thread.

I have no idea about the U.K., but student loan repayments in the U.S. are always made with after-tax dollars. I had about $9k in loans when I graduated. The only thing deductible is the interest expense. At the end of the year you will receive a tax form, 1098-T I think, from your loan institution. There are certain credits available that you could look into come tax time.

Yes, you can deduct the interest up a certain amount. I think you need to file the deduction form in advance though.

 

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