Student Loan interest - tax deductible?
Answer:
Taxpayers who have student loans are allowed to deduct up to $2,500 in annual interest payments on the loan directly from their gross income, subject to phase-out rules.
In the current year the phase-out amount was if the Modified Adjusted Gross Income was more than $75,000 if single, head of household or qualifying widower and $150,000 if married filing jointly.
Qualifying loans include any debt incurred to pay for higher education expenses for you, spouse or a dependent at the time the debt was incurred.
The student must have been enrolled on at least a half-time basis when the loan was made in order for the interest to be deductible. The student will receive a form verifying his or her half-time basis eligibility.
In the current year the phase-out amount was if the Modified Adjusted Gross Income was more than $75,000 if single, head of household or qualifying widower and $150,000 if married filing jointly.
Qualifying loans include any debt incurred to pay for higher education expenses for you, spouse or a dependent at the time the debt was incurred.
The student must have been enrolled on at least a half-time basis when the loan was made in order for the interest to be deductible. The student will receive a form verifying his or her half-time basis eligibility.
