| Is your student loan tax deductible? The answer is a | | | | college, university or vocational school that meets the |
| qualified yes. For most people you can deduct the | | | | student aid program guidelines administered by the |
| interest paid on a student loan. However, there are | | | | U.S. Department of Education. |
| exceptions that you need to be familiar with. | | | | The interest payments are deductible over the life of |
| You may be able to deduct up to $2,500 of the | | | | the loan, but the loan must be taken out to pay for |
| interest paid, which should lower your tax bill. And the | | | | the educational expense. For example, if you take |
| good news is, you will not need to itemize your | | | | out a personal loan for something other than your |
| deductions to claim the deduction. You cannot use | | | | education, you will not be able to deduct the interest |
| the 1040EZ Tax Form; you will need to use either | | | | payments. |
| the 1040A Form or the 1040 Form. | | | | You can deduct the interest from almost any loan |
| If you are married, you must file a joint form, you | | | | that is used specifically for your educational |
| cannot file separately. Also, if you can be claimed as | | | | expenses. However, you cannot deduct the interest |
| an exemption by anyone else, you are ineligible for | | | | paid to a relative. |
| the deduction. | | | | The qualifying expenses for a student loan include |
| To be eligible for the student loan interest deduction, | | | | tuition and fees, room and board, books, supplies and |
| you need to have taken the loan for yourself, your | | | | other expenses. The IRS requires that you be able |
| spouse or your dependent. Interestingly, a dependent | | | | to identify where and how this money was spent. |
| does not necessarily have to be a relative, but it | | | | As with all things from the IRS, there are qualifying |
| must be a person who receives most of their | | | | limits for the student loan interest deduction. If you |
| support from you. | | | | make over a certain income, you will not be allowed |
| The IRS also requires that the student be enrolled at | | | | to claim the deduction. |
| least half time in a program that leads to a degree | | | | For more details check with your tax preparer or IRS |
| from an eligible educational institution. This includes a | | | | Publication 970, Tax Benefits for Education. |