Student Loan Interest Deduction Amounts
You may be able to deduct interest you pay on a qualified student loan. And, if your student loan is canceled, you may not have to include any amount in income.
The deduction is claimed as an adjustment to income so you do not need to itemize your deductions on Schedule A Form 1040.
You cannot claim the deduction if:
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Another taxpayer claims an exemption for you as a dependent,
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Your filing status is married filing separately, or
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You are not legally obligated to make payments on the loan.
A qualified student loan is a loan you took out solely to pay qualified higher education expenses. The expenses must have been:
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For you, your spouse, or a person who was your dependent when you took out the loan,
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Paid or incurred within a reasonable time before or after you took out the loan, and
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For education furnished during an academic period when the recipient was an eligible student.
If you paid $600 or more of interest on a qualified student loan during the year, you will receive a
Form 1098-E (PDF), Student Loan Interest Statement, from the financial institution, from a governmental unit (or any of its subsidiary agencies), from educational institutions, or any other person to whom you had paid student loan interest of $600 or more in the course of their trade or business.
More information on student loan interest deduction and other education benefits is available in Publication 970, Tax Benefits for Education.
|
Student Loan Interest Deduction |
|
|
2006 |
2007 |
|
Maximum Expenses Eligible |
$2,500 |
$2,500 |
|
Phaseout range (modified AGI)* |
$50,000 - $65,000
($105,000 - $135,000 MFJ) |
$55,000 - $70,000
($110,000 - $140,000 MFJ) |
Last Update: Dec. 7, 2006
