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Student Loan Interest

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Money Talk > Taxes

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muneebgs
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Student Loan Interest  Reply with quote  

Your student loan interest is tax deductible. The maximum you can deduct for student loan interest paid is $2,500 per tax return. The instructions on the 1040 tax form show you how to compute your deduction based on your income level. There are some income limits. If you are:

Married and filing jointly: Your adjusted gross income must be under $135,000 to get any deduction and must be $100,000 or less to get the full $2,500 deduction.

Filing as single, head of household or qualifying widow(er): Your adjusted gross income must be under $65,000 to get any deduction and must be $50,000 or less to get the full $2,500 deduction.
Post Fri Mar 30, 2007 8:01 pm
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muneebgs
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Tax Benefits To Help You Save on Paying For College  Reply with quote  

There are several ways to help put some of the money you spend on a college education back in your pocket. College Tax Credits will reduce dollar-for-dollar the amount of federal taxes you owe. College Tax Deductions allow you to reduce your taxable income, which may in turn reduce the amount of taxes you owe.

Hope Scholarship Credit (HSC)

The Hope Scholarship Credit, also referred to as Education Credit, is one of two credits available to help families offset the costs of higher education by reducing the amount of federal income tax. The Hope Credit allows families to claim a credit of up to $1,500 for qualified education expenses paid for each eligible student for the 1st two years of undergraduate education. It is a nonrefundable credit, which means that it can reduce the family tax to zero.


Lifetime Learning Credit (LLC)

Lifetime Learning Credit, also referred to as Education Credit, offsets the costs of higher education by reducing the amount of federal income tax. The Lifetime Learning Credit allows families to claim a credit of up to $2,000 for qualified education expenses paid for each eligible student (year 3 & up) taking at least one course. It is a nonrefundable credit, which means that it can reduce the family tax to zero.


Student Loan Interest Federal Reduction

Parents and independent students may deduct interest on student loans borrowed to meet college expenses Deduction is for interest payments made during the first 60 months (5 years) in which interest payments are required.
Post Tue Apr 10, 2007 3:06 pm
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