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Got a college student in your family? If so, and a student loan is part of the educational experience, you may be able to reduce your taxable income by up to $2,500 by deducting the interest you paid this year. And you don’t have to itemize on your tax return to do it.
To qualify for the deduction, the loan must have been taken out only to pay qualified education expenses at an eligible institution. Qualified expenses include:
- Tuition and fees
- Room and board
- Books, supplies, and equipment
- Other necessary expenses, such as transportation
Eligible institutions are accredited public, nonprofit, and private for-profit postsecondary institutions, such as colleges, universities, and vocational schools. Also included are institutions offering internship or residency programs leading to a degree or certificate from a hospital, a health-care facility that offers postgraduate training, or an institution of higher education.
The qualifying student may be you, your spouse, or your dependent and must be enrolled at least half time in a program leading to a degree, certificate, or other recognized educational credential.
The interest deduction is phased out based on adjusted gross income (AGI). Married couples must file jointly to claim the deduction. Interest payments are deductible for the life of the loan.
MFN-1106-E49E
Article is for educational purposes only and is not intended to provide specific tax or legal advice. For answers to tax questions, please see your tax professional. For legal questions, consult an attorney.
Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (800) 369-2862. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America. The Representative may also be a credit union employee that accepts deposits on behalf of the financial institution.
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