Why Can't I Claim Student Loan Interest if I'm Married?

Some married couples can't deduct student loan interest.
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It's a known fact that when you put on the rings, you give up some things from your single life -- including some tax breaks. There are additional wrinkles in the filing requirements that might disallow some deductions after you've gotten hitched. However, tying the knot doesn't necessarily mean you can't deduct your student loan interest.

Basic Requirements

Whether you're married or not, deductions only apply if every penny of the loan is used for educational purposes. If you used most of it for education, but also took a trip to Fiji for fun, you can't deduct any of the interest. You must be enrolled at least part-time when you apply. Also, you can't count loans from a relative or an employer plan. Finally, you can't use the married filing separately status -- if you do you can kiss your deduction goodbye.

Too Much Income

The deduction is off the boards under any circumstance if your modified adjusted gross income is too high. The MAGI limits are $150,000 for married couples filing jointly for the 2012 tax year. By comparison, it was $75,000 for single filers. When your MAGI falls between $120,000 and $150,000 you're in the "phaseout range," where your maximum deduction starts dropping as your income goes up. For example, if your MAGI is right in the middle -- $135,000 -- you can't deduct more than $1,250 of student loan interest.

Too Much Debt

When you file jointly, the IRS proceeds as if everything you're doing is as a couple. That includes the $2,500 it allows for loan interest deductions. So, another way you may be shut out of this deal is if your spouse has lots of loans that come out to more than $2,500. Even though you may have the same amount or more, there's simply not enough in the pot for both of you.


The IRS also reserves this deduction for people paying their own bills. If either of you can be claimed as a dependent, you can't deduct your student loan interest. For example, if your spouse's parents still claim her as a dependent, your student loan interest won't lower your income taxes.

Tax Reporting

At the end of the year, you should get a Form 1098-E that shows how much interest you paid. If you find you're eligible, you must use Form 1040 or Form 1040A to file your return. Sorry, you can't be lazy and use the short Form 1040EZ. The total of your interest, plus your spouse's interest up to the $2,500 limit, goes on line 33 if you're using Form 1040,or line 18 on Form 1040A.

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