Student Loan Interest Can Be a Deduction

Once you graduate, if you opted to finance your education, you'll be responsible for paying back any student loans. While you won't see a direct tax break in accordance with student loan repayment, you can deduct that you've paid, up to $2,500.

Student is deducted through Form , on line 33. Using electronic filing software is the simplest way to determine the deduction, as entering the interest amount is all you have to do, and the software will calculate the deduction for you.

In order to deduct interest on a student loan, the following must all be true:

Unlike previous rules, which required you to be fully responsible for the debt in order to claim the deduction, you are currently able to deduct interest even if your parents pay back the loan. However, you still aren't eligible to be a dependent.

That stated, the deduction only qualifies for the person who took out the student loan. This means that your parents are able to claim the deduction if the loan is in their name.