Take the Deduction
You may be able to deduct the interest on your student loans from your federal income taxes. To be eligible for the deduction, the IRS says you must meet some requirements. And because the IRS has a particular way of phrasing things, we'll just pass along those requirements here in their own words [source: IRS]:
- You paid interest on a qualified student loan in the current tax year;
- You are legally obligated to pay interest on a qualified student loan;
- Your filing status is not married filing separately;
- Your modified adjusted gross income is less than a specified amount, which is set annually; and
- You and your spouse, if filing jointly, cannot be claimed as dependents on someone else's return.
Because tax laws change often, check with an accountant, tax preparation specialist or the IRS to determine if you're eligible to take the deduction.