What is Student loan interest deduction?
In short
Individuals can deduct up to $2,500 a year of interest on qualified education loans as an adjustment in arriving at adjusted gross income, so it is available without itemizing.
Key takeaways
- It phases out at higher levels of modified adjusted gross income.
- It isn't available to married people filing separately or to someone claimed as a dependent.
- The taxpayer must be legally obligated on the loan.
Where it's tested
REG: Individual Taxation: Adjustments & Deductions — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A taxpayer pays $3,200 of qualified student loan interest. Assuming no income phase-out applies, what amount is deductible?