Student loans can cause a lot of stress for Americans who opted to get a higher education, but there is a tax break that can help.
The COVID CARES Act and the American Rescue Plan did a few things to help give relief during the pandemic to help with financial stress.
While this was helpful, payments still need to be made on student loans.
This means tax breaks could be the answer for many seeking help with their loans.
What to know as a graduate with $1,000s in student loan debt
$2,500 deduction
Anyone who pays taxes and makes education payments can get relief if they took loans out for the cost of school.
Interest paid on your loan can be deducted when you file a tax return.
The most you can claim is $2,500.
How to qualify for the student loan interest deduction
- Paid interest on education loans in 2021
- You’re legally obligated to pay interest on a this type of loan
- Cannot file married filing separately
- You and your spouse aren’t claimed as dependents by anyone else
You do not need to itemize this deduction.
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