Students in the United States who have Student Loans could get a tax reduction this year to make their finances a little easier. After all, a large number of these students have to pay a lot of money in taxes and interest and thanks to the new Tax Break they could get some of that money back.
This is achieved thanks to the deduction of interest on student loans. Through this we can get a deduction on the Tax Return of the amount of interest paid on the student loan. It is true that we first have to pay off that student loan, but then we can get part of that money back or, sometimes, all the money paid.
Who can apply for a Student Loan Refund?
Each student citizen has a specific case. Therefore, each Tax Return submitted will be studied individually. Knowing this, we have to check how much we have paid in loan interest in previous years. Within the Tax Return we can deduct up to 2,500 dollars of what we have paid in the previous year.
So, if we have made fewer payments, we may even get all the interest back. This can undoubtedly be a considerable financial relief. We should bear in mind that many types of these loans can be used for this purpose. Federal and private loans can be used as long as they are for education expenses.
However, we also have to bear in mind that our income influences whether or not we can get this Student Loan repayment. If we have a high income, with a modified adjusted gross income of between 80,000 and 95,000 dollars per year maximum, we will not be able to apply for this financial help. This is in the case of being single.
In any case, the IRS can help us with this. All we will need is all the documentation related to the student loan. In addition to that, we must complete Form 1098-E in case we made payments of less than $600 in interest on these student loans.
