Question: ” Is my student loan interest deductible?”
Answer: Assuming you meet certain requirements, you may be able to claim all or part of the student loan interest that you’ve incurred during the year.
Generally, a qualified education loan is a debt you incur to pay qualified higher education (undergraduate and graduate) expenses for yourself, your spouse, or a dependent at an eligible educational institution in a program that leads to a degree. The IRS provides specific requirements regarding the definitions of both an eligible educational institution and qualified higher education expenses. To qualify for the deduction, you must have been enrolled in the institution at least half-time at the time of the loan.
For the tax year 2013, you may be able to adjust your income to $2,500 from your gross income if you’ve paid interest on a qualified education loan for qualified higher education expenses during the year.
To be eligible for the deduction, your modified adjusted gross income (MAGI) must fall below threshold figures.
If you are single, you can claim the interest you paid up to $2,500 for the 2013 tax year if your MAGI is at or below $60,000. The deduction is only partially deductible when your MAGI falls between $60,000 and $75,000, and it is completely phased out once your MAGI reaches $75,000.
If you are married filing jointly, you can claim the interest you paid up to $2,500 for the 2013 tax year if your MAGI is at or below $125,000. The deduction is only partially deductible when your MAGI falls between $125,000 and $155,000, and it is completely phased out once your MAGI reaches $155,000.
No deduction is allowed if your filing status is married filing separately.
The student loan interest deduction is taken as an adjustment to income and is reported on line 33 of the 1040 tax return form. This means you can claim this deduction even if you do not itemize deductions.
If you are claimed as a dependent, you may not take the deduction. If you are a dependent and your parent borrows money to pay for your college tuition, he or she may claim the student loan interest deduction.
For more information, see IRS Publication 970 or speak with your tax advisor.
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