Education Tax Incentives

Deduction for Student Loan Interest

An annual deduction is allowed for interest paid on qualified education loans. The amount of your student loan interest deduction for 2019 is gradually reduced (phased out) if your modified AGI is between $70,000 and $85,000 ($140,000 and $170,000 if filing a joint return). You cannot take a deduction if your modified AGI is $85,000 or more ($170,000 or more if you file a joint return).

This deduction cannot be claimed if the taxpayer is married filing a separate return.

The maximum deductible amount of interest is $2,500. The deduction may be taken even if an individual does not itemize deductions. The deduction applies to any loan during which interest payments are required. Qualified loans include indebtedness for course work at post-secondary educational institutions, certain vocational institutions, or other institutions conducting internship or residency programs.

Qualified education loans can be used for expenses including tuition, fees, and room and board, but must be reduced by any tax-free educational benefit.

IMPORTANT NOTE: If you can be claimed as a dependent on another person's tax return, you may not claim the interest deduction for that year.

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