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The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: Andrey_Popov/Shutterstock February 16, 2022 Michelle Lambright Black is a credit expert with over 19 years of experience, a freelance writer and a certified credit expert witness. In addition to writing for Bankrate, Michelle's work is featured with numerous publications including FICO, Experian, Forbes, U.S. News & World Report and Reader’s Digest, among others. Chelsea has been with Bankrate since early 2020. She is invested in helping students navigate the high costs of college and breaking down the complexities of student loans. Bankrate logo The Bankrate promise
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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Student loans are a great tool that you can use to make getting an education affordable. And once you start to , your student loans may be able to help you . However, student borrowers preparing to file their taxes in 2022 (for the 2021 tax year) are facing a different set of circumstances than usual. have put payments and interest on hold for millions of borrowers, and many private lenders have offered hardship programs as well, so some borrowers may not be able to claim the usual deductions. So, how will these unique situations affect your upcoming tax return? Read on to learn more about what to expect as a student loan borrower when you file your taxes this year. What is the student loan interest deduction
The allows eligible borrowers to deduct up to $2,500 in student loan interest fees from their taxes each year. It’s considered an “above the line” deduction because it reduces the amount of your taxable income. You don’t have to itemize to take advantage of the student loan interest deduction. (This is good news for anyone who wants to keep it simple and take the on their tax return.) But in order to qualify, you must meet certain criteria. , to qualify for the student loan interest deduction: You must be legally obligated to pay interest on a qualified student loan. You must have paid interest on a qualified (private or federal) student loan. Married taxpayers must file jointly with a spouse. No one else can claim you (nor your joint-filing significant other) as a dependent on their tax return. Your income is below annual limits. Also, keep in mind that you can’t deduct interest paid by your employer under an educational assistance program. IRS income limits
In addition to the requirements above, your modified adjusted gross income (MAGI) also needs to fall below a certain threshold to claim the full amount (up to $2,500) of your student loan interest deduction. If your MAGI falls between $70,000 and $169,000, you may only be eligible for a partial, phased-out deduction depending on your filing status. IRS income limits for this deduction vary based on your tax filing status as follows. Filing status Potentially eligible for full deduction MAGI phaseout begins MAGI cutoff point for any deduction Single Less than $70,000 $70,000 $85,000 Head of household Less than $70,000 $70,000 $85,000 Qualifying widow(er) Less than $70,000 $70,000 $85,000 Married filing jointly Less than $140,000 $140,000 $170,000 Married filing separately Ineligible Ineligible Ineligible Can you still claim the student loan interest deduction in 2022
The Coronavirus Aid, Relief, and Economic Security (CARES) Act and subsequent extensions in put payments and interest fees on pause for millions of federal student loan borrowers. Thanks to President Biden’s latest executive order, administrative forbearance is available to eligible borrowers through Dec. 31, 2022. Naturally, you can’t deduct interest fees that you didn’t pay. Yet you may still be able to deduct student loan interest on your tax return if your loans were not eligible for the federal loan moratorium. That includes some older federal loans held by commercial servicers and private student loans. If you opted out of the CARES Act payment suspension, you won’t be eligible, because the law’s provision also cut interest rates to zero, which means that all of your payments went toward your loans’ principal balance. If you can’t claim the student loan interest deduction (or if the amount you’re able to deduct is smaller this year), try to look on the bright side. There’s a good chance that you saved far more money this year through your payment and interest pause than you would have saved by claiming the deduction. What s next
Not sure whether you qualify to ? It might be a good idea to talk to a tax expert. The IRS also provides a helpful online tool you can use to see if you can claim the student loan interest deduction. You can visit the IRS website and to see if you’re eligible. Once you determine that you are eligible to claim the deduction, the process isn’t complicated. As long as you paid $600 or more in student loan interest, your student loan servicer should send you a Form 1098-E (via mail or email). Your servicer should also send a copy of this form to the IRS. From there, you can give the form to your tax preparer or include the deduction on the tax return you’re filing on your own. If you didn’t pay $600 or more in student loan interest, you can log in to your online account and add up the interest charges you did pay and claim those for the deduction. Remember, the student loan interest deduction isn’t the only way to save money on taxes. You can also research to see if you qualify for education tax credits, like the . SHARE: Michelle Lambright Black is a credit expert with over 19 years of experience, a freelance writer and a certified credit expert witness. In addition to writing for Bankrate, Michelle's work is featured with numerous publications including FICO, Experian, Forbes, U.S. News & World Report and Reader’s Digest, among others. Chelsea has been with Bankrate since early 2020. She is invested in helping students navigate the high costs of college and breaking down the complexities of student loans. Related Articles