Educational Tax Benefits
Student Loan interest - tax deductible?
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.
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