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Student Loan Interest Deduction
The 60-month limit on interest payments no longer applies.
You may take the deduction if all four of the following apply:
You paid interest during the year on a qualified student loan (any loan you took out to pay the qualified higher education expenses for yourself, your spouse, or anyone who was a dependent when the loan was taken out. The person for whom the expenses were paid must have been an eligible student).
Your filing status is NOT married filing separately.
Your modified AGI is less than*
- $75,000 if single, head of household, or qualifying widow(er);
- $155,000 if married filing jointly.
Use lines 2-4 of the worksheet on page 31 of the IRS 1040 instruction book to figure your modified AGI.
You are not claimed as a dependent on someone's (such as your parent's) tax return.
You must reduce your expenses by the following benefits:
Employer provided educational assistance benefits that are not included in box 1 of your W-2 forms.
Tax-free distributions from a Coverdell education savings account (ESA).
Tax-free distributions from a qualified tuition program.
U.S. savings bond interest that you exclude from income because it is used to pay qualified education expenses.
The tax-free part of scholarships and fellowships.
Veterans' educational assistance
Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance.
*These are the amounts for the 2012 filing season, please refer to the 1040 instructions for the tax year you are filing to verify the modified AGI amount(s) for that year.
For more detail on this deduction, please see IRS Pub. 970 http://www.irs.gov/publications/p970/ar01.html - d0e19.
Tags: federal,form