Can I Deduct Student Loan Interest On My Taxes?

Deducting Student Loan Interest on Your Taxes

1. Eligibility:

   - To be eligible to deduct student loan interest, you must meet the following criteria:

     - You paid interest on a qualified student loan during the tax year.

     - You are legally obligated to make the interest payments.

     - You are not claimed as a dependent on someone else's tax return.

   - The student loan interest deduction applies to loans taken out for qualified education expenses like tuition, fees, books, and supplies required for enrollment at eligible educational institutions.

2. Income Limitations:

   - The student loan interest deduction has income limits, starting to phase out at $70,000 MAGI for singles and $140,000 for married couples, and fully phased out at $85,000 for singles and $170,000 for married couples.

   - The MAGI limit is adjusted annually for inflation, so it may change in future tax years.

3. Deduction Amount:

   - Eligible taxpayers can deduct up to $2,500 of student loan interest paid during the tax year.

   - The deduction is an above-the-line deduction, meaning you can claim it even if you do not itemize deductions on your tax return.

   - Loan servicers issue Form 1098-E, the Student Loan Interest Statement annually, reporting the actual interest paid if you've paid $600 or more in interest on a qualified student loan.

4. Filing Requirements: To claim the student loan interest deduction, use Form 1040 or Form 1040-SR (for taxpayers age 65 and older), reporting the deductible amount on line 20.

5. Coordination with Other Education Tax Benefits: You cannot claim the student loan interest deduction if the loan is a refinanced student loan, or if you're claiming the American Opportunity Tax Credit or Lifetime Learning Credit for the same student in the same tax year.