 TITLE: Are Student Loans Tax Deductible? CONTENT: How Do Tax Deductions Work on Student Loans?\n--------------------------------------------\nThe U.S. tax code allows you to deduct up to $2,500 in student loan interest on your tax return every year, depending on how much you paid and your income level. You should receive what's called a 1098-E form from your student loan servicer or lender, which shows how much interest you paid during the year.\nTo qualify for the deduction, you need to meet the following eligibility requirements:\n*   You paid interest on a qualified student loan during the tax year.\n*   You're legally obligated to pay interest on the loan.\n*   You aren't married and filing separately from your spouse.\n*   Neither you nor your spouse (if you're filing jointly) can be claimed as a dependent on someone else's tax return.\n*   Your modified adjusted gross income (MAGI) is less than a certain amount, which is determined each year (more below).\nThe loan itself also needs to meet certain criteria for you to qualify for the deduction:\n*   It was taken out to pay qualified higher education expenses for you, your spouse or a person who was your dependent when you borrowed the money.\n*   The expenses were incurred for education provided during an academic period for an eligible student.\n*   The expenses were paid or incurred within a reasonable period of time before or after you took out the loan.\nFor the 2020 tax year, the income limit is a MAGI of $85,000 if you're filing on your own and $170,000 if you're married filing jointly. The value of the deduction is gradually reduced as your income gets closer to that limit: If your MAGI is $70,000 or more for single and head-of-household filers and $140,000 or more if you're married filing jointly, you'll begin to see a decreased deduction.\nRemember, this is your MAGI, which is lower than your gross income. If you're using tax preparation software or you've hired a professional, they can figure out what your MAGI is for you. If you're filing taxes on your own, you can use a worksheet provided by the IRS. END