| Being a student with a loan can be a huge hassle, but | | | | out the loan. All of these can mean you cannot |
| with the student loan interest deduction you can | | | | qualify for the deduction. |
| make it less of one. With the student loan interest | | | | Something else you may want to know before trying |
| deduction you can use it for up to $2,500 of the | | | | to qualify for the deduction is that there are some |
| interest you might have paid on your loan and it's | | | | instances where costs may be incurred and have to |
| interest. One exception is with student loans that | | | | be reduced. This occurs when there are non-taxable |
| may be nullified, in that case you can completely | | | | distributions from a Coverdell education savings |
| exclude the total from your income. | | | | account, or from a qualified tuition program, if there |
| When it comes to the interest reduction it has to be | | | | is interest from US Savings Bonds that are |
| claimed on a loan that was to pay for qualified higher | | | | non-taxable, parts of scholarships and fellowships that |
| education programs only. On the other hand it can be | | | | are non-taxable, any kind of veterans education |
| one used for you, your spouse or your kids, meaning | | | | assistance and any non-taxable amounts (excluding |
| any dependents. | | | | gifts, bequests or inheritances). Make sure you check |
| Claiming things such as fees, tuition, supplies, | | | | into any connection to any of these things before |
| equipment, room and board and transportation can | | | | applying for a student loan interest deduction. |
| be done when claiming a loan interest reduction. It | | | | One last thing that should be considered is if you are |
| can be used for a college, university or even a | | | | paying on any loans after 2002, you have a different |
| vocational school. A couple other things to take into | | | | option in claiming payments for the reduction. This is |
| consideration when looking into the interest deduction | | | | because the "first 60 months" requirement on |
| is that the student must be at least a half-time | | | | interest is no longer part of loan agreements after |
| student in a degree, certificate, or any other qualified | | | | this date. This allows for deductions on voluntary |
| program, as long as you are legally obligated to pay it | | | | interest payments, instead of only on required ones. |
| back. | | | | Having the option to save on student loans and the |
| There are a few things you should realize though | | | | interest they incur, can greatly help a lot of families |
| before claiming interest reduction that may effect | | | | who want to give their children a better education |
| whether or not you qualify. These include if another | | | | and future. By taking advantage of the loan interest |
| person can claim you as a dependent, you are | | | | reduction they are allowing themselves the chance to |
| married but file separately, for any reason you are | | | | do just that. |
| not legally allowed to clear the loan or a relative took | | | | |