STUDENT LOAN INTEREST
Only the person whose name is on the student loan and who is legally obligated to pay the loan can deduct the student loan interest. If you did not sign or co-sign for the loan you cannot deduct the interest.
You cannot deduct student loan interest if you are being claimed as someone else’s dependent, or if you are filing as married filing separately.
The student loan interest deduction can reduce your taxable income by up to $2500
There is a phaseout for the Student loan interest deduction, which means the amount you can deduct gets reduced when your modified adjusted gross income hits certain income levels and is even eliminated at certain income levels -
• If your filing status is single, head of household, or qualifying widow(er), then the phaseout begins at $65,000 until $80,000, after which the deduction is eliminated entirely.
• If your filing status is married filing joint, then the phaseout beings at $130,000 until $160,000, after which the deduction is eliminated entirely.
Enter the interest you paid for your student loan by going to Federal>Deductions and Credits>Education>Student Loan Interest Paid in 2019 (Form 1098E)
Look on your 2019 Schedule 1 line 20 to see your student loan interest deduction
Student loan interest payments have Never been a credit on a federal tax return. They are only entered as an Adjustment to Income.
To enter student loan interest paid -
- Click on Federal Taxes (Personal using Home and Business)
- Click on Deductions and Credits
- Click on I'll choose what I work on (if shown)
- Scroll down to Education
- On Student Loan Interest Paid (Form 1098-E), click the start or update button
Or enter student loan interest in the Search box located in the upper right of the program screen. Click on Jump to student loan interest
IRS From 1040 Line 20 Instructions - https://www.irs.gov/pub/irs-pdf/i1040gi.pdf#page=89
Student Loan Interest Deduction
You can take this deduction only if all of the following apply.
• You paid interest in 2019 on a qualified student loan (defined later).
• Your filing status is any status except married filing separately.
• Your modified adjusted gross income (AGI) is less than: $85,000 if single, head of household, or qualifying
widow(er); $170,000 if married filing jointly. Use lines 2 through 4 of the worksheet in these instructions to figure your modified AGI.
• You, or your spouse if filing jointly, aren't claimed as a dependent on someone else's (such as your parent's)
2019 tax return.