Apr 11, 2008

Q & A: Student Loan Interest Deduction

QUESTION: Our adult daughter earned about $4600 in 2007. We supported her and paid a lot of medical expenses for her which I know we can deduct with ours. Can we also get a credit for her student loan interest that we paid for her in 2007 (about $1100)? She met the criteria for the qualified student when the loan was made. It was made through the dept. of education since transferred to a private agent. We did not deduct it on her tax return since she did not pay it.

ANSWER: Yes, you are eligible to deduct your daughter's student loan interest on your tax return. Be aware that the credit is reduced if your modified adjusted gross income (AGI) exceeds $110,000 ($55,000 if filing single) and is completely phased out when modified AGI is $140,000 ($70,000 if filing single).

3 responses:

Anonymous,  April 14, 2008 at 9:06 PM  

Jim, I'm certain there are many parents out there not taking advantage of this credit

About IRS Mind April 15, 2008 at 1:16 PM  

Actually, this is one of Cecil's posts.

Anonymous,  May 12, 2008 at 10:51 AM  

I don't believe the answer is correct. You can't take a tax deduction for interest you pay for a loan you are not liable to pay.

Check with the IRS.
Eligibility for student loan deduction. You cannot claim the deduction if any of these are true:

Another taxpayer claims an exemption for you as a dependent.
Your filing status is married filing separately.
You are not legally obligated to make payments on the loan.

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