How to Claim Your Student Loan Interest Deduction

turbotax student loan interest

MYRA Advisors LLC (“MYRA Advisors”) is a wholly owned subsidiary of MYRA Inc. (“MYRA”). Investment management and advisory services are provided by MYRA Advisors, an SEC registered investment adviser. Download student loan servicing forms to set up auto debit, apply for a cosigner release, or request a deferment.

  • Who have incurred at least $20,000 in undergraduate and/or graduate student loan debt, and have at least $5,000 in outstanding student loan debt at the time of applying for the tax credit.
  • Utilize the DEPENDucator or RELucator free tax tools to determine who qualifies as a dependent or use the CHILDucator tool for the Child Tax Credit.
  • Most people earning enough to be in the 24% tax bracket or higher won’t qualify for the student loan interest deduction.

The college loan relief laws in effect have no impact on the Student Loan Debt Relief Tax Credit program. SmartAsset’s free toolmatches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.

Ways to Spot Student Loan Scams

If you pay $15,000 in tuition, your credit will equal $2,000 because of the $10,000 limit on qualifying educational expenses. All features, services, support, prices, offers, terms and conditions are subject to change without notice. Get cash back for good grades with this private student loan provider. The Intuit TurboTax simulations provided a beneficial demonstration when trying to break down taxes for my parents who even after decades of filing taxes did not have a clear idea of why exactly they received a refund.» Carlos learns how to file his taxes using tax preparation software. You’ll need to file your taxes each year to make sure that you’ve paid the right amount.

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The American Opportunity Tax Credit

Since most student loans are subsidized or insured by the government, it doesn’t hurt the government at all to give a little incentive to students. If you want to get a higher education, and you can’t afford it, you don’t have many options. You can check out my Student Loan Debt eBook for more information, but your turbotax student loan interest main option is going to be student loans. You can deduct up to $2,500 of student loan interest that you paid. The great thing about this deduction is that it is an adjustment to income, so you don’t have to itemize. This is very helpful for young adults and college students, since many of them don’t itemize.

Past performance is not indicative of future results. You cannot claim the student loan interest deduction if your modified adjusted gross income is above $85,000 ($170,000 if you file a joint return with your spouse). If you paid at least $600 in student loan interest during the year, your loan servicer should send a Form 1098-E showing how much you paid. If you don’t receive a 1098-E, you can still claim the student loan interest deduction. You just need to call your loan servicer or log in to your online account to find the amount of interest you paid. In order for a scholarship or grant to be tax-free, you must use it to pay for education-related expenses that you need while you’re earning a degree.

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