Now, you can deduce interests from your student loans!
Student loans have become more than important in many areas because almost about 70% of the students use it to get their degrees. As a student, it can become hard at times to pay for your college fees and there may be several reasons for that. Now, students who have taken loan for completing their studies, there is a good news for them. Deduction of Interest from Student Loans is now happening and you can avail this opportunity. Not every loan has interest due to the complicated tax code. But now, Deduction of Interest from Student Loans is now possible because many of the grads don’t own a house who can itemize their deductions.
Want to know whether you qualify for Deduction of Interest from Student Loans? Read below
Deduction of Interest from Student Loans is possible if you are fulfilling the following things. First of all, note that the maximum amount of money that can be deduced from your student loan is $2500 per year. Also, to this deduction, there is a limit in income because of the tax rules.
Like for example your gross income can not be more than $80,000 and if you are married; then your gross income should not be more than $160,000. Also, the deduction slowly reduces when you start to reach the upper limit.
Deduction of Interest from Student Loans can only be made possible only if got the loan from a qualified loan. Now, for example you took a loan from your parents of $15,000 for your college; you can not deduce any interest from this loan because you pay them on your taxes. Another example is that if your employer gives you money, that money is also not eligible for any sort of interest deduction.
The money that you borrow must be spent on yourself, your spouse or a person that is dependent. And if you want a deduction on the interest, the person who is receiving that money should be listed for a part-time.