How to Claim the Student Loan Deduction

A student loan seems like the best thing in the world when you're trying to pay for college. But when repayment time rolls around, it can be a bear. One bright spot is that you can deduct the interest you pay on student loans when you file your yearly tax return. If your adjusted gross income is greater than $75,000, or $150,000 for married couples filing jointly, you will not be eligible for the deduction, however. And whatever your status, the Internal Revenue Service doesn't allow you to deduct more than $2,500 of student loan interest per year.

Items you will need

  • Tax-related information, such as Forms W-2, Forms 1099, and other income- and deduction-related data
  • Student loan statements and payment records
  • Previous year's tax return

Work through the first page of Internal Revenue Service Form 1040 to arrive at your adjusted gross income for the year. You'll need to know not only your income, but which other deductions you qualify for, to make the calculation.

Check your AGI against the student loan interest deduction limits chart in Publication 970. For single filers, if your AGI is between $60,000 and $75,000, your deduction is reduced. Married taxpayers filing jointly can deduct the full amount of interest with an AGI of $120,000 or less. If your AGI is between $120,000 and $150,000, the deduction will be reduced.

Gather your student loan statements and payment documents and calculate how much interest you paid. If the total is not presented on the statement, add up the interest amounts for yourself.

Calculate your reduced deduction if your income leaves you in the phaseout gap. Figure for single filers follows: (AGI minus $60,000) / $15,000. Multiply the result by the interest amount you paid. Subtract the result of that calculation from your interest amount. For example, if you paid interest of $1,000 and had AGI of $70,000, your calculation would be $70,000 minus $60,000, or $10,000. $10,000 divided by $15,000 equals .667. $1,000 times .667 equals $667. $1,000 minus $667 equals $333, which is the amount you can deduct.

Put the allowable deduction amount on line 33 of Form 1040 or line 18 of Form 1040A. If your income does not subject you to phase-out calculations, enter the amount of interest you paid, not to exceed $2,500.


  • You can also figure the student loan deduction by using the worksheet in IRS Publication 970.
  • If you are married filing jointly, the phaseout deduction calculation is as follows: (AGI minus $120,000) divided by $60,000. Multiply the result by the amount of interest you paid. Subtract the result of that calculation from the amount of interest paid.

About the Author

D. Laverne O'Neal, an Ivy League graduate, published her first article in 1997. A former theater, dance and music critic for such publications as the "Oakland Tribune" and Gannett Newspapers, she started her Web-writing career during the dot-com heyday. O'Neal also translates and edits French and Spanish. Her strongest interests are the performing arts, design, food, health, personal finance and personal growth.