turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

tcsmitty2
New Member

Why isn't turbo tax deducting the full amount of my student loan interest in the "federal tax due" window?

When I enter $1,200 of student loan interest paid, the tax due window only goes down by a couple hundred dollars.  I understand that it should deduct up to $2500

Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Best answer

Accepted Solutions

Why isn't turbo tax deducting the full amount of my student loan interest in the "federal tax due" window?

A student loan deduction is a deduction, not a credit. It does not reduce your tax dollar for dollar. It reduces your tax by reducing your taxable income. The maximum benefit you get from a deduction is the amount of the deduction times your marginal tax rate. For example, if you are in the 25% marginal tax bracket, a $1,000 deduction reduces your tax by, at most, $250.
The maximum student loan interest deduction that you can claim is $2,500 per tax return.

View solution in original post

1 Reply

Why isn't turbo tax deducting the full amount of my student loan interest in the "federal tax due" window?

A student loan deduction is a deduction, not a credit. It does not reduce your tax dollar for dollar. It reduces your tax by reducing your taxable income. The maximum benefit you get from a deduction is the amount of the deduction times your marginal tax rate. For example, if you are in the 25% marginal tax bracket, a $1,000 deduction reduces your tax by, at most, $250.
The maximum student loan interest deduction that you can claim is $2,500 per tax return.
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies