Deduct up to $2,500 annually

If your modified adjusted gross income is less than $70,000 ($145,000 if filing a joint return) there is a special deduction allowed for interest paid on a student loan.

The student loan interest deduction is taken as an adjustment to income. This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040).

Student Loan Interest Deduction at a Glance
Do not rely on this table alone. See the IRS website for complete details.

Feature	Description
Maximum benefit	You can reduce your taxable income by up to $2,500
Loan qualifications	Your student loan:
	must have been taken out solely to pay qualified education expenses, and
	cannot be from a related person or made under a qualified employer plan.
Student qualifications	The student must be: you, your spouse, or your dependent enrolled at least half-time in a degree program

Time limit on deduction	You can deduct interest paid during the remaining period of your student loan.
Phase-out	The amount of your deduction depends on your income level.

Required forms:

• 1098-E (provided by the lender)
• 1040, line 33 or 1040A, line 18

Note: the above information was adapted from the IRS website. For complete details on the following tax benefits, refer to the IRS website or consult your tax advisor.

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