Tax Deductions Student Loan Interest

If you’re paying interest on student loans, you may be able to take a tax deduction for that interest. The rules are not very clear, so it’s important to know what they are before you try to claim this deduction on your taxes.

Student loan interest, however, can be a tax deduction.

Student loan interest is a tax deduction. Yes, it’s true! You can actually take the cost of your student loan payments as an annual deduction on your federal income taxes. If you pay $1,000 per month in student loans, that’s worth $12,000 in deductions each year (assuming a tax rate of 25%). That said, not all forms of debt are created equal when it comes to this tax benefit—mortgage interest and credit card interest aren’t deductible.

You qualify if you are legally obligated to pay interest on a qualified student loan and if the student loan is solely in your name or in your name and your spouse’s name.

You qualify if you are legally obligated to pay interest on a qualified student loan and if the student loan is solely in your name or in your name and your spouse’s name.

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You cannot deduct student loan interest that was paid by someone else, such as a parent.

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If the student loan is not solely in your name or your spouse’s name, then you do not qualify for the deduction unless you are lawfully married and filing a joint return.

If the student loan is not solely in your name or your spouse’s name, then you do not qualify for the deduction unless you are lawfully married and filing a joint return.

If you are filing jointly, then only one spouse needs to be eligible for an education credit on their own behalf (and it does not matter which spouse that is).

Additionally, you must also be legally obligated to pay interest on the student loan.

In addition to being a dependent, you must also be legally obligated to pay interest on the student loan.

This means that the student loan must be in your name or your spouse’s name (if married). Additionally, the student loan must be a qualified student loan. To help figure out whether a particular student loan is considered a qualified student loan for tax deductible purposes, consult with an accountant or financial advisor who specializes in this area of taxation. If you are not sure if all of these requirements are met and would like more information about how much money you can save by deducting interest paid on your student loans, call us today at 800-977-0015!

Make sure that you know all the rules about this deduction so that you can use it effectively.

Make sure that you know all the rules about this deduction so that you can use it effectively.

Know the rules for this deduction.

• Which loans qualify for the deduction? Only federal loans and student loan refinancing are eligible for this tax write-off. Private student loans do not count.
• How does it work? If your income is above $80,000 ($165,000 if filing jointly), then your student loan interest deduction will be limited to a maximum of $2,500 per year. If your income is below these thresholds, there is no limit to how much of your student loan interest that may deduct from taxes each year.
• How do you claim this on your taxes? When filing with Turbotax or other online tax preparation software, enter 1098-E or 1098-T on Line 1b of Form 1040 (or Form 1040A). This will allow the program to calculate how much of the interest paid during the calendar year qualifies as an itemized deduction against total income (Line 40). If using paper forms instead of filing electronically, fill out Schedule A and attach Form 1098-E or 1098-T along with any other information necessary to complete Schedule A correctly before mailing everything off!

We can’t stress enough how important it is to make sure you understand all the rules about this deduction so that you can use it effectively. The last thing you want is for all of your hard-earned money to go to waste, right? So take some time out of your day and do your research!