1. What is Form 1098-E?
Form 1098-E is provided by the entity servicing the taxpayer’s student loan if they paid $600 or more in interest during the tax year. This form allows taxpayers to claim a student loan interest deduction, which can help reduce taxable income and overall tax liability.
2. How to Enter Form 1098-E Information
Step 1: Access the Review/Print Section
From the left-hand side of the main tax return page, select Review/Print to expand the menu.
Step 2: Navigate to Schedule 1
Click on the Schedule 1 tab to open the Additional Income and Adjustments to Income form.
Step 3: Locate the Student Loan Interest Deduction
Scroll down to Part II – Adjustments to Income.
Find Line 21 (Student Loan Interest Deduction) and click the menu icon to open the worksheet.
Step 4: Enter the Interest Paid
On the Student Loan Interest Deduction Worksheet, enter the total interest paid (as shown on Form 1098-E) in Line 1.
Note: The maximum deductible amount is $2,500. The software will not accept a higher amount.
3. Important Notes
Income Limits for Deduction
Single filers:
Deduction is reduced at $75,000 AGI.
Deduction is eliminated at $90,000 AGI.
Married Filing Jointly:
Deduction is reduced at $155,000 AGI.
Deduction is eliminated at $185,000 AGI.
This deduction is NOT available if:
Filing status is Married Filing Separately.
The taxpayer is claimed as a dependent on someone else’s return.