Student Loan Interest Deduction


This tax deduction is available if you are paying interest on a loan that has been solely used to pay for education expenses


This tax deduction can reduce your taxable income by up to $2,500 (the equivalent of up to a $500 reduction in your tax liability, depending on your federal tax bracket). The amount you are eligible for depends on your income and the amount of student loan interest you’ve paid. It is taken as an adjustment to your income, so you may claim this deduction even if you do not have itemized deductions on Form 1040, Schedule A.

Qualifications:

Bullet You must be paying interest on a loan that has been used solely to pay for qualified higher education expenses incurred during enrollment at least half-time in an eligible program leading to a degree, certificate, or other recognized credential at an eligible institution of higher education.
Bullet Your modified adjusted gross income must be $75,000 or less if single, and $150,000 or less if married and filing jointly.
Bullet Qualified education expenses include: tuition, room and board, course-related expenses (books, supplies, equipment), mandatory student activity fees, and other necessary education-related expenses.
Bullet If you are claimed as a dependent on another person’s tax return (e.g., your parents’ tax return), only the person who claims you can apply for the deduction.
Bullet You may not claim this deduction if your filing status is “married filing separately.”

How to Claim Your Benefits:

To determine your eligibility and claim education tax benefits, including the Student Loan Interest Deduction, you must file a federal income tax return. To calculate your deduction, use IRS Form 1040 (Line 33) or Form 1040A (Line 18), Student Loan Interest Deduction, at www.irs.gov.


Tax information is provided for informational purposes only. Student Financial Aid Services, Inc. is not engaged in providing legal, accounting, or tax services. Please consult a tax professional, the Internal Revenue Service, or IRS Publication 970 for tax information and assistance. A U.S. Treasury regulation requires us to inform you that any U.S. tax advice contained in this communication (including any hyperlinks) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to any party, who is not the original and intended recipient of this communication, any transaction or matter addressed herein.