2015 Student loan interest deduction

How to calculate your student loan interest tax deduction? How much student loan interest is deductible? What is a student loan deduction? Is your student loan interest tax-deductible?

It includes both required and voluntarily pre-paid interest payments. You may deduct the lesser of $5or the amount of interest you actually paid during the year. Student loan interest deduction.

This deduction allows you to deduct interest paid on student loans for yourself, your spouse, or your dependents. It can reduce your taxable income by as much as $500. Read on to learn how these things can benefit you.

This is known as a student loan interest deduction. If you have qualifying student loan debt , you can deduct the interest you paid on the loan during the tax year. You can deduct interest on student loans paid by you if you use the single, head of househol or qualifying widow(er) filing status, or by you or your spouse if you file a joint return. It enables these individuals to deduct the interest on student loans that they have paid during the tax year. Therefore, you will only receive $50 even if you paid a higher amount of student loan interest.

However, the maximum deduction the IRS provides is $500. Moreover, you can capitalize on this deduction without having to itemize it. You might be able to deduct up to $5of the interest you paid on a student loan last year.

You may be able to deduct interest you pay on a qualified student loan. Generally, the amount you may deduct is the lesser of $5or the amount of interest you actually paid and it is subject to a phaseout, which means the amount of the deduction gradually decreases and phases out completely if and when your modified adjusted gross income (MAGI) amount reaches the annual limit. You’re legally obligated to pay interest on a qualified student loan. You paid interest on a qualified student loan.

If you’re married filing jointly: You can deduct the full $5if your modified adjusted gross income (AGI) is $130or less. Your deduction is gradually reduced if your modified AGI is more than $130but less than $16000. The student loan interest tax deduction. Here’s the short version. The IRS allows a deduction of as much as $5of interest paid on qualifying student loan debt per tax year.

You can’t claim the deduction if your MAGI is $80or more ($170or more if you file a joint return). For variable rate loans, although the interest rate will vary after you are approve the interest rate will never exceed 8. For loan terms of years to years, the interest rate will never exceed 9. Jump On Our Rates Before Rates Jump Up! Paying back your student loan won’t generate any tax breaks, but paying the interest on that student loan can, by reducing your income tax. The max deduction is $500. This max is per return , not per taxpayer, even if both spouses on a joint return qualify for the deduction.

In addition, you cannot claim interest you paid because of a judgment obtained after you failed to repay a student loan. Importantly, if the taxpayer deducts the maximum $10for real estate property taxes paid or accrued during the taxable year on the State return, the taxpayer can also deduct up to $10for mortgage expenses paid or accrued if the mortgage expenses meets statutory requirements.