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| Question |
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Is interest paid on student loans tax deductible?
I have about $120K in student loans right now that I am paying off. I paid about $7500 in interest in 2006 on those loans. My loan provider sends me a form stating this for tax purposes. Is it tax deductible?
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| By
sigcyril |
Posted on
02/07/07 Total Answers
2 |
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| Answers- |
| Absolutely. Even if you don't itemize deductions! |
| Answer by :
Meg W On Date
2007-02-07 04:26:42 |
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| Yes, but as always check with a good tax person for your specific situation. |
| Answer by :
theanswerman On Date
2007-02-07 04:27:24 |
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| yes it is, you should received a 1099 form with the interest you can report you take that form with yor w-2 to the person who is goint to do your taxes... If you want to do it yourself I recommend you go to the www.irs.gov site the go to free e-file is really easy to do it yourself. |
| Answer by :
Nita On Date
2007-02-07 05:10:42 |
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| The maximum deductible interest on a qualified student loan is $2,500 per return. If you are a taxpayer whose return status is married filing jointly, you are allowed to deduct the full $2,500 only when your modified adjusted gross income (MAGI) is $100,000 or less. If your MAGI is more than $105,000, but less than $135,000, the amount of your student loan interest deduction is gradually reduced. The instructions for Form 1040 (PDF) show you how to compute the deduction. If your MAGI is $135,000 or more, you are not able to take any deduction.
For those whose filing status is single, head of household, or qualifying widow(er), the full $2,500 deduction is allowed for MAGI levels equal to or below $50,000. For MAGI between $50,000 and $65,000, the deduction amount is gradually reduced. The Form 1040 Instructions show you how to compute the deduction. If your MAGI amount is $65,000 or more, there is no deduction.
There is no deduction if you file as married filing separately, if you are claimed as a dependent, or if the loan is from a related party or a qualified employer plan. For more information, refer to Publication 970, Tax Benefits for Education, Chapter 4; Tax Topic 505, Interest Expense; and Tax Topic 513, Educational Expenses .
http://www.irs.gov/publications/p970/index.html |
| Answer by :
Rob On Date
2007-02-07 05:17:36 |
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