Student loan interest deduction

What Is the Student Loan Interest Deduction?

If you're paying off student loans, there's good news: you can deduct up to $2,500 of the interest you paid during the year. Even better, this is an above-the-line deduction, which means you don't need to itemize to claim it. You get it on top of the standard deduction.

Who Qualifies

To claim the student loan interest deduction, you must meet all of these requirements:

• You paid interest on a **qualified student loan** during the tax year
• You are **legally obligated** to pay the interest (it's your loan, not someone else's)
• Your filing status is **not** Married Filing Separately
• You (or your spouse if filing jointly) are not claimed as a dependent on someone else's return

Income Phase-Outs

The deduction starts to phase out at higher income levels:

If your income is above the phase-out end, you can't claim any deduction.

Form 1098-E

Your loan servicer will send you Form 1098-E if you paid $600 or more in interest during the year. This form shows the total interest you paid. Even if you paid less than $600 and don't receive the form, you can still deduct the interest—just check your loan account statements.

How to Enter in FileJoy

1. Click **Deductions & Credits** in the left sidebar
2. Select **Student loan interest**
3. Enter the total interest paid (from your 1098-E or loan statements)
4. Enter your lender's name and EIN (from the 1098-E)
5. Save

FileJoy will automatically apply the income phase-out if applicable and show you exactly how much you can deduct.

Tips

• This deduction is available even if you take the standard deduction
• Consolidation and refinanced loans still qualify (as long as they were used for qualified education expenses)
• Parent PLUS loans: the interest is deductible by the parent, not the student
• If you're in an income-driven repayment plan and paying less than the accruing interest, you can only deduct what you actually paid