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Are Your Student Loans Tax Deductible? Tips from Your Denver Accountant?

Paying back student loans is expensive and it’s natural to want to save as much money as possible. You may be wondering - are your payments tax deductible?  Unfortunately, you can’t deduct your entire payment, only the portion that covers your interest charges. It’s important to know the correct way to report the interest on your income taxes so it can reduce the amount of tax you pay at the end of the year. Here are some facts and tips to help navigate your student loan deductions:

  • Married persons who file separately cannot claim a deduction for student loan interest.
  • Interest deduction is available to you only if your modified adjusted gross income is below the annual limit. It was more than $80,000 or $160,000 if filing a joint return. 
  • You can only claim the deduction for interest on parts of your student loan that actually funded educated related expenses. 
  • You cannot claim the deduction if someone can claim you as a dependent on their tax return. 
  • You cannot claim the deduction using Form 1040EZ 

Tax returns can get complicated, that’s where your Denver tax service comes into play. Bloch, Rothman, and Associates will make sure that you get the most out of your tax return and your student loans.