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Student Loan Tax Deductions

Student loans can be a difficult financial burden for many young people today. The skyrocketing costs of a college education can make it difficult for most adults to graduate without owing some amount of money on student loans. Luckily, there is some relief available to most people who owe student loans. You can take a student loan tax deduction.

Every year, you are allowed to take a tax deduction for the interest you paid on student loans, up to $2,500. If your loan amounts are high, this interest paid can really add up—and the deduction can really help you manage the payments better. Even if you owe less on these loans, you can still deduct as much as you have paid in student loan interest. If you paid more than $600 on student loan interest during the year, your lender should provide you with a form 1098-E that reports your total payments to make filing for the student loan deduction easier.

Limitations of Student Loan Tax Deductions

Of course, there are limitations and exemptions to the student loan tax deductions available to you, just like any other tax credit or deduction. Most people who pay interest on student loans for themselves or a defendant do qualify, however. You may be eligible for a tax deduction for your student loan payments if:

  • You owe money on a qualified student loan and have paid interest during the past tax year.
  • You are single or married and filing a joint return.
  • You cannot be claimed as dependents on someone else’s tax return.
  • Your income is less than $75,000 if filing singly or $150,000 if filing jointly.
  • You are not filing your income taxes using Form 1040EZ.
  • Your loan was only used to pay for educational expenses.

Most recent grads (and many not-so-recent grads) should qualify for these deductions. While this deduction may not seem like much, it can still help, especially if you are struggling to pay off your debts.

Help from a Cleveland Bankruptcy Layer

Unfortunately, for many Americans, a simple tax deduction isn’t enough to mitigate the overwhelming personal debts that they owe. If you find yourself in this situation, you still have options. There are may legal options that can help you minimize or even eliminate a large portion of your debt. Talk to a Cleveland bankruptcy lawyer at Luftman, Heck, & Associates today for a free consultation on your unique situation to learn what we can do to help and discuss all your options. Call us at (216) 586-6600 today to schedule your appointment.

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