Question

I would like to learn more about student loans and taxes. Can I claim a student loan deduction for paying down my loan?

Answer

To answer your question about student loans and taxes, you can’t deduct amounts you paid or prepaid on the principle.

However, a student loan deduction is available for you to deduct up to $2,500 in interest paid on a qualifying student loan.

The student loan interest deduction begins to phase out if your adjusted gross income (AGI) is:

  • $65,000 if filing single, head of household, or qualifying widow(er)
  • $130,000 if married filing jointly

The deduction is completely phased out if your AGI is:

  • $80,000 if filing single, head of household, or qualifying widow(er)
  • $160,000 if married filing jointly

 

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