How do I know if I can get money back on tax return if I paid off a lot of Student Loans Interest this last year?

If you have a 1098E for the student loan interest you paid then enter it.   You get an above the line deduction from tax owed, not money back.   And you can only deduct the interest , not the principal.

STUDENT LOAN INTEREST

Only the person whose name is on the student loan and who is legally obligated to pay the loan can deduct the student loan interest. If you co-signed then you are legally obligated to pay if the primary borrower defaults or does not pay.    If you did not sign or co-sign for the loan you cannot deduct the interest.

You cannot deduct student loan interest if you are being claimed as someone else’s dependent, or if you are filing as married filing separately.

The student loan interest deduction can reduce your taxable income by up to $2500

There is a phaseout for the Student loan interest deduction, which means the amount you can deduct gets reduced when your modified adjusted gross income hits certain income levels and is even eliminated at certain income levels -  

•If your filing status is single, head of household, or qualifying widow(er), then the phaseout begins at $65,000 until $80,000, after which the deduction is eliminated entirely.

•If your filing status is married filing joint, then the phaseout beings at  $130,000 until $160,000, after which the deduction is eliminated entirely.

 Enter the interest you paid for your student loan by going to Federal>Deductions and Credits>Education>Student Loan Interest Paid in 2021 (Form 1098E)

Look on your 2020 Schedule 1 line 20 to see your student loan interest deduction

It depends. Student loan interest will reduce your income which in turn will reduce your tax liability. If you enter the interest from your student loan then TurboTax will determine if you still have taxable income on your tax return.

• Where do I enter my student loan interest?

If your student loan funds paid for some of your education in 2021, then you may be eligible for the education credit.  If you are eligible you may also use this on your tax return. The credits are American Opportunity Credit (AOC) and Lifetime Learning Credit (LLC).

• What education tax credits are available?

There is no tax  benefit for paying back student loans, other than the interest deduction and that is limited to $2500 per year.  So, for example, if you have a tax liability, and are in the 12% tax bracket,  and pay $2500+ of interest, the deduction will reduce your tax bill by $300 (2500 x 0.12 = $300). 

Back when you were a student, the paying of tuition, even with student loan money, had a significant tax benefit (up to $2500 actual money back each year). That money usually went to the student's parent, since the student was a dependent and the parent had a tax liability.  Now that you're only paying back the loan, there is no longer that kind of benefit.