Student loans interest may be deductible
The price of a college education continues to rise, but it is possible to obtain a tax deduction that reduces the cost. Taxpayers of certain characteristics can deduct the interest payments on a loan the Student on their tax returns. While parents and students should consult with your tax advisor to verify that they
can access this deduction, the following list of some of the rules of the Internal Revenue Service
(IRS) on this issue can be a good starting point:
The possible deduction amount
The deductible maximum interest for a loan the Student is $2,500. This amount is per statement, not per person, and varies depending on certain factors such
as the way in which it is declared and income.
Way to declare
Taxpayers who declare their taxes as "married by
declaring in a separate way" may not be auorizados to not deduct interests on loans to students. They
can deduct those who declared as "married declaring jointly," "single or unmarried," "head of family", or "widower or widow".
Income limits
Also some restrictions apply to the entry. Taxpayers who have a modified adjusted income (MAGI) less than certain amount can deduct $2,500 of interest on the loan tothe student. The deduction is phased out as it
increases the MAGI, and there is no deduction available for MAGI beyond certain limit. The MAGI limits vary depending
on the form of declare. For a definition of the MAGI, contact the IRS or your tax advisor. They
can also provide information about the MAGI limits used to determine thedeductibility of the interest on the loans to the student. For 2009, the amount of taxfor interest on education loans is removed for an adjusted gross income (MAGI) of
between $120,000 and $150,000 for married couples who pay joint return. For whichrender individual returns, the deduction is removed with income of $60,000 to $75,000.
Loans to parents against loans to children
A child who no longer depends
on the family and takes a loan the Student to his name can be authorised to deduct the interest. If the loan is taken in the name of oneof the parents for the child's education, the interest on that loan may be deductibleprovided the child depended on parents when the loan was received. If both the father and the son are both loans to finance education, to determine who receives thededuction will
depend on if the child was dependent on parents. In that case, if theStudent was not dependent on parents when the loan was taken, can that parents may not deduct the interests, but the Student Yes; If the Student was dependent, the parents can deduct interest.
You may have other restrictions on the deductibility of interest on a loan apply to the Student at the federal level, in
addition to state tax laws vary. So again make surewith your tax advisor before deducting interest on a loan in his statement. For moreinformation, see publication 970 of the IRS, Tax Benefits for Education
(tax benefits for education) and the Tax Topic 456 Student Loan Interest Deduction
(deduction of interests on loan to
the student).