Eligibility Criteria:
Qualified Student Loan: The loan must have been taken out solely to pay for qualified education expenses, including tuition, fees, room and board, books, supplies, and other necessary expenses such as transportation. These expenses must be for you, your spouse, or a dependent at the time the loan was taken out. irs.gov
Income Limits: For the 2024 tax year, the deduction is phased out for taxpayers with a Modified Adjusted Gross Income (MAGI) between $80,000 and $95,000 ($165,000 and $195,000 for joint filers). Taxpayers with a MAGI above these ranges are not eligible for the deduction. irs.gov
Claiming the Deduction:
Form 1098-E: If you paid $600 or more in student loan interest to a single lender during the year, you should receive Form 1098-E from that lender, detailing the amount of interest paid. irs.gov
Tax Reporting: Report the deductible amount of student loan interest on Schedule 1 (Form 1040), line 21. This amount will then be included in your Adjusted Gross Income (AGI) calculation on Form 1040. irs.gov
For comprehensive details, refer to IRS Publication 970, "Tax Benefits for Education," which provides in-depth information on the Student Loan Interest Deduction and other education-related tax benefits.
Understanding these guidelines ensures that you can effectively claim the Student Loan Interest Deduction and reduce your taxable income accordingly.