The National Directory of Certified Public Accountants

Ask A CPA - Interest - Itemized Deduction

Student Loan Interest

The $2,500 maximum deduction for interest paid on student loans begins to phase out for a married taxpayers filing a joint returns at $125,000 and phases out completely at $155,000, For single taxpayers, the phase out range is between $60,000-$75,000 . If the following 5 criteria apply, then up to $2500 is deductible, Your filing status is not "married filing separately"; You are not claimed as a dependent on someone else's return such as your parents; You paid interest on a qualified student loan; The payments were during the first 60 months that payments were required to be made; Your modified income was less than the specific amounts ($150,000 filing status married filing joint and $75,000 single, H of H and qualifying widower). For filing status married filing joint MAGI of $120,000 through $150,000, a phase-out occurs and more than $150,000 no deduction is allowed. For filing status not married filing joint MAGI of $60,000 through $75,000, a phase-out occurs and more than $75,000 no deduction is allowed.

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