Parent Plus Student Loan Interest Deduction – The student loan interest deduction could be claimed by the taxpayer when the student loan was taken out solely to pay qualified education expenses; the loan cannot be from a related person or made under a qualified employer plan.
In addition, the IRS stipulates that the student must function as the taxpayer, dependent or partner, and needs to be registered at least half-time in a degree program. Furthermore, the deduction is bound by the taxpayer’s income; student loan interest cannot be deducted in the event the taxpayer’s gross income exceeds if filing or $150,000 $75,000 a joint tax return with the partner.
BREAKING DOWN ‘Student Loan Interest Deduction’
It isn’t necessary to itemize the deduction as the student loan interest deduction is claimed as an adjustment to income. The total amount of interest paid in a certain tax year is found on Form 1098-E, which can be furnished by the lender to the borrower.
In Canada, taxpayers can claim interest paid on student loans subject to certain conditions. A Canadian citizen could be eligible to file for interest paid on a student loan in a given year or the preceding five years for post-secondary education, if the loan was received under the Canada Student Loans Act, the Canada Student Financial Assistance Act, or similar provincial or territorial government laws.
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