Calculator for claiming student loan interest on taxes
This is a quick calculator for claiming student loan interest on taxes. One can easily know how much can he/she deduct the payments on the qualified student loan interest .The good point about student loan interest deduction is that maximum deduction of $2,500 in student loan interest payments can be claimed regardless of whether you itemize your deductions or take the standard deduction.
Who are eligible for the student loan interest deduction ?
In following situations , you can not claim deduction on account of interest paid on qualified educational loan
- Your (filing status is single, head of household, or qualifying widow) modified adjusted gross income is more than $85,000 and that limit is $170,000 if married and filing a joint return
- Your parent or another relative claims you as a dependent on their own taxes
- You or your spouse are not legally responsible for repaying the loan (you’re making payments on a loan that your child took out in their own name, for example)
- You’re married and filing separate returns
What qualifies for the interest deduction?
Interest paid on a loan borrowed for the sole purpose of paying the qualified educational expenses like -college tuition fee, boarding expense ,text books and supplies -for you, your spouse, or a dependent while attending Colleges, universities, and vocational schools are eligible schools if they are approved to participate in a student aid program administered by the U.S. Department of Education.
Student loan interest deduction phase out 2019
If MAGI or modified adjusted gross income of a taxpayer having status other than “married filing jointly ,is more than $70,000 but less than $85,000 for tax year 2019, then the maximum educational loan interest deduction of $2.500 will be reduced proportionately.In that case the formula to compute the tax deduction for educational loan will be as under :
educational loan interest deduction=(MAGI-70000)*$2500/15000
For , taxpayer filing joint return, the phaseout for year 2019 begins at $140,000 and completely over at $170,000. The formula for computing educational interest deduction is
educational loan interest deduction=(MAGI-140000)*$2500/30000