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Student Loan Interest Tax Deduction

Below is student loan tax information as well as student loan interest tax deduction help.

What is a student loan interest?

A student loan interest is the interest paid during the year on qualified student loan. A qualified student loan is a loan taken out to pay qualified education expenses such as:

  • tuition and fees
  • room and board
  • books, supplies and equipment
  • other necessary expenses such as transportation

Note that the rules for qualified education expenses for the student loan interest tax purposes are less strict than the rules for qualifying for education tax credit such as the Hope tax credit or the Lifetime learning tax credit.

How much of the student loan interest is tax deductible?

Up to $2,500 of the student loan interest paid on qualified student loans are tax deductible. The tax deductible amount for student loan interest may be reduced or phased out based on the taxpayer's filing status and modified adjusted gross income.

What tax form to claim student loan interest tax deduction?

Student loan interest tax deductions can be claimed on tax form 1040A line 18 or tax form 1040 line 33.

How to qualify for student loan interest tax deduction?

To qualify for student loan interest tax deduction, the student:

  • must have been enrolled at least half time in a degree program at an eligible educational institution at the time the student loan was taken out,
  • must be the taxpayer, spouse (married filing jointly) or a dependent
Can a married filing separately student claim student loan interest tax deduction?

No.

Can I deduct student loan interest for a dependent's student loan?

Yes, but only if the taxpayer is legally liable to make the interest payments and actually made the payments. For example, if the taxpayer cosigns on the student loan note.

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