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Hey you — yeah, you, the one hiding from the thought of doing your taxes. What if we told you that you could save up to $625 this tax season?

The student loan interest deduction allows you to reduce the amount of your income that’s subject to being taxed by up to $2,500. The way it works is you deduct the interest paid on a qualified student loan that you took out to pay for qualified education expenses — yours, your spouse’s, or a person who was your dependent when you took out the loan.

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So how do you go about claiming this deduction? First, you need to understand exactly what the student loan interest deduction is, and what it isn’t.

Is this interest deduction the same as a tax credit?

This is important: a deduction does not mean that you will get $2,500 back from the government. A deduction simply means that you could lower your taxable income by up to $2,500. So if you qualify to deduct $2,500 and you have a marginal tax rate of 25 percent, you would pay $625 less in taxes. But keep in mind that this is the best case scenario — if your tax rate is 15 percent, for example, you would only save $375.

There’s also a phaseout that can limit the maximum deduction you can claim if your earnings fall within a specified range (see “How much money you’ll get back,” below).

A tax credit doesn’t just reduce the amount of income subject to tax — it reduces the tax itself, in some cases resulting in a refund. If you or any of your dependents are still in school, there are two tax credits that help you offset the costs of higher education by reducing the amount of income tax you owe:

You can claim both of these credits for yourself, your spouse, or any children you claim exemptions for on your tax return. There’s a $2,000 limit per return for the Lifetime Learning Credit. But the limit for the American Opportunity Credit is $2,500 per eligible student — you can claim it for multiple students, if they are dependents.

Are you eligible?

The good news is that it’s pretty easy to figure out whether you’re eligible to claim your deduction or not. Just work your way down the following checklist. If you can check off every point, you’re good to go. The not-so-good news is that there are quite a few criteria you must meet in order to qualify.

You can claim your student loan interest deduction if:

  • You paid interest on a student loan during the 2015 tax year (this student loan must be one you took out solely to pay for higher education expenses in order to qualify).
  • The student loan(s) in question is in your name.
  • You were enrolled at least half-time in a degree program when you took out the loan.
  • You are filing as a single taxpayer or as “married filing jointly.”
  • You have a modified adjusted gross income (MAGI) of less than $80,000 as a single taxpayer, or $160,000 if you are filing a joint return.
  • Nobody else is claiming you as a dependent on their tax return.

How can you claim your deduction?

To claim your deduction, you enter certain information pertaining to your student loans in form 1040 (which is the form you use to file your taxes). If you paid $600 or more in interest on your student loans, you should receive a form called the 1098-E from your loan provider. This form contains all the information you’ll need to enter in form 1040, including how much interest you paid on your loans in the past year. If you use a service like TurboTax to file your taxes, that’s great — you can claim your deduction in the same way.

How much money will you get back?

The amount of money you get back through the deduction will depend on how much you earn as income, and how much you deduct. You can use calculators, like this one from TurboTax, to estimate how much money will be refunded to you if you claim your deduction. The IRS also provides this worksheet to help you calculate how much your deduction will be.

As noted above, you can claim the student interest rate deduction if your modified adjusted gross income (MAGI) is less than $80,000 (or $160,000 on a joint return). But be aware that if your MAGI is between $65,000 and $80,000 (if filing as an individual) or $130,000 to $160,000 (filing jointly), there’s a phaseout of the benefit — your maximum deduction will be reduced according to a formula that’s explained here. The maximum deduction for a couple filing jointly with $145,000 in MAGI, for example, is $1,250.

Can you claim the deduction for a dependent?

Generally speaking, the interest rate deduction can only be claimed by the person who paid the interest. So if the student loan in question is in your name, and you have been paying the interest on it, you can claim the deduction. If you were a dependent of your parents when they took out a loan to pay for your educational expenses, then they would claim the deduction.

If you had someone make an interest payment on your behalf, say as a gift or a work perk, you can still claim the deduction.

If you’re married, can you still claim the deduction?

Yes, but there’s a catch — you can’t double dip. So if both you and your spouse are eligible to claim a $2,500 deduction, you can’t both claim a deduction totaling $5,000. Whether you’re married or not, you can only claim a single deduction, totaling a maximum of $2,500.

And no, you can’t trick the government by filing your taxes as ‘married, filing separately’. Remember the eligibility qualifications up top? You only qualify to claim your student loan interest deduction if your filing status is “single” or “married, filing jointly.”

Can you still claim the deduction if you’ve refinanced your loans?

If you’re in the student loan game, you’re probably clever enough to have picked up on the fact that refinancing your student loans is one of the best options you have to potentially save some money. If you’ve already refinanced your student loans, not to worry — you should still be able to claim your student loan interest deduction, just as long as the loan money was only used to pay for qualified higher education expenses.

If, however, you used the money for any other purpose, you cannot deduct the interest paid on the refinanced loan.

Ariha Setalvad <ariha@credible.com> is a Credible staff writer. Follow us on Twitter at @Credible.