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If I have a student loan from finishing my graduate degree, can I deduct its interest payments from salary for tax purposes? Is there any education related tax credit that can be applied for payments made against a student loan?

Chris W. Rea
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EndlessSpace
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1 Answers1

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In general, yes, the interest portion of student loan payments is tax deductible, but this is not always the case, as tax law (as always) is more complicated than it could be:

  1. Review Chapter 4 of IRS Publication 970 for the details of when it is tax deductible
  2. There are income restrictions - if you make more than $75,000 as a single income or $150,000 while married the interest payments are not tax deductible
  3. Remember that you'll have to itemize to get this deduction. The standard deduction is $5,700 for a single person, and usually you'll have to either give a lot of money to charity or have a mortgage where mortgage interest is tax deductible in order to see any benefit (for example, are you actually paying more than $5700 in student loan interest per year? That's a lot of loans).
  4. For all the possible tax deductions/credits, see the entire Publication 970
CrimsonX
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