Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Repaying Student Loans and other Student Loan topics.
The interest you pay on your student loans can help reduce your annual tax liability. The federal government allows you to deduct up to $2,500 annually of the interest you pay on any student loan debt that your family accumulated to cover college expenses for you, your spouse, or a dependent. The amount you are actually allowed to deduct depends on your income. A single filer with an adjusted gross income under $50,000 can claim the full amount while those with an income to $65,000 can receive a partial deduction. For a couple filing jointly, those amounts are $105,000 for the full deduction and $135,000 for the partial deduction. If you exceed $65,000 as a single filer or $135,000 for joint, you do not qualify for this deduction. Any borrower who paid more than $600 in student loan interest during the year, should receive Form 1098-E from their lender indicating the amount of interest paid.
|Jennifer Mathes, Ph.D.|