The 2008 IRS Guidelines provided much needed relief to those struggling with student loans: a tax deduction. At the end of each year, your lender will either email or mail you a 1098-E form to notify you of how much interest you paid on your student loan. Using the1098-E, up to $2,500 of that interest can be tax deductible on your tax return, claimed as an adjustment to income. This deduction is available to couples filing jointly with an adjusted gross income of less than $145,000 and singles with an adjusted gross income of less than $70,000. It can be claimed under the following criteria, found on the IRS website:
- You paid interest on a qualified student loan in tax year 2013
- You are legally obligated to pay interest on a qualified student loan
- Your filing status is not married filing separately
- Your modified adjusted gross income is less than a specified amount which is set annually, and
- You and your spouse, if filing jointly, cannot be claimed as dependents on someone else’s return
For more information, check out consumerfinance.gov
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