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The interest paid on student loans will reduce the amount of the taxpayer's Adjusted Gross Income. It is not necessary to "itemize" deductions in order to take advantage of these savings.
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Deductions are available to millions of low and moderate-income individuals in the critical first 5 years after graduation.
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There is a phased-in $2,500 tax deduction for interest payments on qualified education loans.
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The full deduction is available for single filers with Adjusted Gross Incomes up to $40,000 (phased out to $55,000) and $60,000 for joint filers (phased out to $75,000).
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