Understanding the Student Loan Interest Deduction: Navigating Income Limits

Dr. Friday Tax Tips
Dr. Friday Tax Tips
Understanding the Student Loan Interest Deduction: Navigating Income Limits
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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, President of Dr. Friday’s Tax and Financial Firm, elucidates the intricacies of the student loan interest deduction. This tax benefit allows borrowers to deduct up to $2,500 from their taxable income for paid student loan interest. However, it’s subject to income limits. For single individuals, the deduction begins to phase out at $75,000 and completely phases out at $90,000. For married couples, these limits are between $155,000 and $185,000. Dr. Friday highlights the importance of these thresholds, emphasizing that exceeding them disqualifies taxpayers from claiming the deduction. The episode is a must-listen for anyone navigating the complexities of student loans and taxes.

Transcript

G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The student loan interest deduction allows borrowers to write off up to $2,500 of their taxable income if they paid interest on their student loan. Now, this is one of those that is means-tested, guys, so that means that if you earn between $75,000 and $90,000, by $90,000, you’re not going to get the deduction for single individuals. It starts means testing at $155,000, up to $185,000 for a married couple. These are very important numbers because, obviously, if you’re claiming this and you make too much money, the interest isn’t going to be a tax deduction.

Need help with taxes? Call me at 615-367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.