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Student Loan Interest Deduction

August 25, 2011

John Jastremski Presents:

 

Student Loan Interest Deduction

 

Definition

A portion of the interest paid on student loans is deductible from your gross income. The maximum deduction is $2,500.
Prerequisites

  • The interest must be paid on a qualified education loan for qualified higher education expenses. Only interest paid during the first 60 months of the loan is deductible.
  • You must have incurred the debt while you were enrolled on at least a half-time basis in a program leading to a degree, certificate, or other recognized educational credential.
  • To take the full deduction, your modified adjusted gross income (MAGI) must be under $60,000 for single filers or under $120,000 for joint filers. A partial deduction is allowed for single filers with a MAGI between $60,000 and $75,000 and joint filers with a MAGI between $120,000 and $150,000.
  • If married, you must file a joint return.

Key Strengths

  • Provides deduction for student loan interest if eligibility requirements met
  • Room and board are included as qualified higher education expenses

Key Tradeoffs

  • Eligibility for the deduction depends on your income
  • You must have incurred the debt when you were at least a half-time student
  • You cannot take the deduction if you are claimed as a dependent on someone else’s taxreturn

Variations from State to State

  • None

How Is It Implemented?

  • Determine the amount of student loan interest you paid for the year and claim the appropriate deduction on your federal tax return

 

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of John Jastremski, Jeremy Keating, Erik J Larsen, Frank Esposito, Patrick Ray, Robert Welsch, Michael Reese, Brent Wolf, Andy Starostecki and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

 

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com,  access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

 

John Jastremski is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com.

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