Student Loan Tax Deduction for 2011, 2012

With all the different tax deductions out there, it’s easy to see how some could be missed, but sometimes it’s these hard to miss tax deductions that can give your tax return the boost it needs. One of these often overlooked deductions is the one you can take on the interest of a student loan.

There are certain circumstances you have to meet to be able to qualify to deduct your student loan interest:

• You paid the interest on a qualified student loan last year
• Your filing status isn’t married filing separately
• Your modified adjusted gross income is less than $60,000 ($120,000 if filing jointly)
• Neither you or your spouse are claimed as a dependent on someone else’s tax return

Remember, a qualified loan is only a qualified loan if it was taken out for the use of qualified higher education.

Another thing to keep in mind is if you’re a college student and your parents or one of your parents pays back your student loan for you, the IRS treats the money as if it was given to you. Without itemizing, you could deduct up to $2,500 from your student loan interest. This only applies if you are not claimed as a dependent.

There are certain forms you need to use specifically for student loan interest deductions. It’s also a good idea to find out exactly what your adjusted gross income is, which can be tough on your own sometimes. A good place to find out about both of those items is at TurboTax Online.