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April 15, 2022
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I paid off my student loans. Which section do I add that I paid them off?

  • April 15, 2022
  • 1 reply
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Best answer by xmasbaby0

The loan payoff is not deductible.   Only the interest you paid in 2021 is deductible.

 

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

1 reply

April 15, 2022

You do not have to report your student loan payoff for federal tax purposes.

xmasbaby0Answer
Employee
April 16, 2022

The loan payoff is not deductible.   Only the interest you paid in 2021 is deductible.

 

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

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**