If you went to law school in the last 50 years, then there is a good chance that you had to take out some sort of student loan. While your student loan payments may be killing your wallet, Uncle Same wanted to relieve a little bit of that financial stress by allowing you to deduct the interest that you paid in a tax year on your student loans.
The deduction is taken on the first page of your federal tax return and can be taken regardless of whether you itemize your deductions or not. This means that the deduction is not subject to a 2% or 10% limitation.
However, there are some limitations to taking the deduction. First, your filing status cannot be married filing separately.
Second, you cannot be claimed as a dependent on someone else’s return. However, you can deduct any interest paid by your dependents or on behalf of your dependents.
In order to figure out how much in interest you paid for the year, your student loan company will send you the paid interest amount on a Form 1098-E. However, this deduction is reduced as your income grows.
If you are needing some help with your taxes give us a call at 816-524-4949, or visit our website at Hoorfarlaw.com.