The phase-out for the student loan interest deduction begins if you are single with modified adjusted gross income (adjusted gross income minus tuition and fees deduction and domestic production activities deduction, adding back foreign earned income exclusion, foreign housing exclusion & deduction) of over $65,000 or married filing jointly with MAGI over $130,000. If you meet those thresholds, the 1040 instructions include a worksheet (for line 33) for figuring the portion of the $2,500 benefit you may claim. If you are single with MAGI over $80,000, married filing jointly with MAGI over $160,000, don't worry about the worksheet because you cannot deduct any of your student loan interest expenses. Look at the bright side high-earners, at least you don't have to complete another worksheet this tax season.
Circular 230 Notice: Pursuant to U.S. Treasury Department Regulations, all tax advice herein is not intended or written to be used, and may not be used, for the purposes of avoiding tax-related penalties under the Internal Revenue Code or promoting, marketing or recommending advice on any tax-related matters addressed herein
The tax deductions, adjustments, and credits that Congress givith, Congress sometimes taketh. Look out for new limits and phase-outs for the $4,050 personal exemption, an overall limitation on itemized deductions (and a phase-out for the standard deduction), and on the student loan interest deduction. These key on your adjusted gross income (sometimes modified adjusted gross income).
The EFM Lawyer.