Student Loan Interest Deduction

(redirected from Student Loan Interest Deductions)

Student Loan Interest Deduction

A reduction in one's taxable income by the amount one spends in interest payments in the process of repaying student loans. For example, if one's student loan payments included $800 in interest for the tax year, one is does not pay taxes on that $800. The student loan interest deduction is subject to certain restrictions, such as a modified adjusted gross income under a certain amount. Additionally, one may only take the deduction if one was legally obligated to pay interest on the loan. The maximum deduction one could take was $2500 in 2008.

Student Loan Interest Deduction

An adjustment to income for interest paid during the year on qualified higher-education loans. The deduction may be limited if income exceeds a specified amount.
References in periodicals archive ?
b) student loan interest deductions for loans contracted by higher education students in order to pay for their studies and which are recorded in their personal income financial statements.
The bank also is required to reimburse an estimated 130,000 borrowers up to $300 in tax preparation costs for amending their 2011 and 2012 returns to claim student loan interest deductions. In addition, the bank will be required to provide account credits of $92 to consumers subjected to more than five but fewer than 25 collection calls and account credits of $142 to consumers subjected to more than 25 calls.
The survey said to meet the goals of retirement and savings, one can try for grants and low-interest loans through which one can also qualify for tax breaks like the American Opportunity Credit, Lifetime Learning Credit and student loan interest deductions.
> Student loan interest deductions. The interest paid on student loans--Federal Stafford, PLUS and Perkins loans; federal and direct consolidation loans; federal loans for health care professionals; and private education loans issued by schools, banks and nonprofit associations--may be tax-deductible up to $2,500.
"The DOR highlights several issues that are complicated by the inconsistent filing status, such is dependency exemptions, deductible care expenses, passive activity losses and student loan interest deductions. The DOR directs taxpayers and practitioners to various worksheets and explanatory bulletins available on its website.
Be aware of the student loan interest deduction, part of the tax benefits for higher education.
Full browser ?