Student Loan Interest Deduction Major Overview

August 28, 2011

Student Loan Interest Deduction

If you have came to this page looking for information on student loan interest deduction, then you are in the right spot as we will provide you with all the details needed to make yourself familiar with the subject. To give you a feel for what we will be getting into, student loan interest deduction can equate to you being able to use the money you paid on interest as a tax deduction, meaning that it can save you hundreds or thousands. For all the major details on student loan interest deduction, read on the next sections will go into deep detail about it.

student loan interest deduction

Student Loan Interest Deduction – Major Overview

The Tax Relief Act states that you are able to deduct up to 2,500 dollars in the interest that you paid on your student loans each year, meaning that if you spent over that, then you are limited to getting 2,500 dollars back, which you can turn around and drop a large payment on your student loans, getting out of debt faster, and remember, you can do this every year.. A quick note to remember is to use either a 1040A or 1040 form for this, avoid using a 1040EZ tax form as this doesn’t allow student loan interest deduction. As a way for you to get the most information, the main details will be in bulet point form:

  • If you happen to be married and both you and your spouse have student loans, then you will need to fill out a joint form for both of you to qualify for student loan interest deduction.
  • You cannot qualify for student loan interest deduction if you make 70,000 + individually or  140,000 + as a couple.
  • The three categories which make you eligible for student loan interest deduction are that you are paying for your student loan, paying for your spouses loan or paying on a person whom was dependent on you when taking out the loan
  • You also must have been enrolled in school at least in a half time basis as well as graduated or completed the education you set out to get, like colleges or vocational studies.
  • The qualified expenditures aren’t limited to just tuition costs, others that are qualied are living expenses, your textbooks, school supplies as well as your transportation going to and from school. When it comes to deduction for these categories, you must prove to the IRS where and how you spent money on them.
  • Student loan interest deduction can only be used for student loans.

Student Loan Interest Deduction – Conclusion

Now that you know the basics to student loan interest deduction, you can now apply it to your student loan situation to get big money back that you can use towards living expenses or towards paying off your debt a lot quicker than normal. For more information, the best thing to do now would be to contact either your personal tax preparer, or find one in your loacal area as they will be able to get you going, and provide you with the most up to date information on student loan interest deduction.

Category: Student Loan Interest Deduction

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