Are there tax benefits to Student Loans? |
Answer:
Yes! The interest you pay on student loans is tax deductible,
which means it can be deducted from your taxable income. For example, if you make $30,000 a year and pay $1,500 in interest, you would only pay income tax on $28,500.
To qualify for the deduction, you must be enrolled in a degree program at least half-time. The most you can deduct each year is $2,500, even if you paid more than that in interest. This cap starts to decrease if you make more than $50,000 a year, or $105,000 if you file jointly. The deduction goes away entirely if you make more than $65,000, or $135,000 jointly
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