Let’s face it- paying back student loans is painful. At least you’ll be able to deduct the interest paid on the loans!
College is great. However, the fairy tale ends six months after graduation, when it’s time to start making payments on your student loans.
The good news is this; when filing your taxes, you can deduct the amount you paid in interest on your student loans!
Who is Eligible to Deduct Student Loan Interest?
There are certain limitations on who can deduct interest paid on students loans. In other words, you can deduct student loan interest if;
- your filing status is NOT married filing separately
- you paid interest on a qualified student loan during the tax year
- you are legally obligated to pay interest on your qualified student loan
- your modified adjusted gross income falls below the IRS threshold (for single filers this amount is $60,000)
- you and your spouse (if filing jointly) cannot be claimed as dependents on someone else’s tax return (more…)