marym
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Student loan debt can be a significant financial burden for many people. However, there are tax relief options available to help ease the burden. In this guide, we will discuss how to claim deductions and credits for student loan debt on your tax return.
Deductible Student Loan Interest:
One of the most common tax relief options for student loan debt is the deduction for student loan interest. Here are some key points to know about the deduction for student loan interest:
The Lifetime Learning Credit is another tax relief option for those who are paying for higher education expenses. Here are some key points to know about the Lifetime Learning Credit:
Deductible Student Loan Interest:
One of the most common tax relief options for student loan debt is the deduction for student loan interest. Here are some key points to know about the deduction for student loan interest:
- Eligibility: You can deduct up to $2,500 of interest paid on a qualified student loan each year, as long as you are the one legally obligated to make the payments.
- Income Limits: The deduction begins to phase out for single filers with a modified adjusted gross income (MAGI) of $85,000 or more and for married filing jointly filers with a MAGI of $170,000 or more.
- Qualified Loans: Qualified student loans include loans used to pay for qualified education expenses, such as tuition, fees, room and board, and books.
- Form 1098-E: Your student loan servicer will send you a Form 1098-E at the end of the year that shows how much interest you paid on your student loan.
The Lifetime Learning Credit is another tax relief option for those who are paying for higher education expenses. Here are some key points to know about the Lifetime Learning Credit:
- Eligibility: You can claim a credit of up to 20% of the first $10,000 of qualified education expenses, for a maximum credit of $2,000 per tax return.
- Income Limits: The credit begins to phase out for single filers with a MAGI of $60,000 or more and for married filing jointly filers with a MAGI of $120,000 or more.
- Qualified Expenses: Qualified education expenses include tuition, fees, and course materials for any course of instruction at an eligible educational institution.
- Form 1098-T: Your educational institution will send you a Form 1098-T at the end of the year that shows how much you paid in qualified education expenses.
