Many wonder if student loan payments qualify as a deductible on their tax returns. You can deduct up to $2,500 in interest paid on a qualifying student loan. The US Dept. of Education (Sallie-Mae, Navient, etc) will prepare what’s called a 1098-E Student Loan Interest Statement that is available via mail or online statement usually by year-end but no later than mid January.
The student loan interest deduction begins to phase out if your adjusted gross income (AGI) is:
- $65,000 if filing single, head of household, or qualifying widow(er)
- $130,000 if married filing jointly
The deduction is completely phased out if your AGI is:
- $80,000 if filing single, head of household, or qualifying widow(er)
- $160,000 if married filing jointly