Checkmark iconCan I Write This Off?

Can I write off student loan payments?

TL;DR

Yes, you can deduct the interest paid on student loans, but not the principal payments.

Detailed Answer

The interest you pay on your student loans is deductible on your federal tax return. This is known as the student loan interest deduction. It allows you to deduct up to $2,500 of the interest you paid on a loan for higher education. However, this deduction is subject to income limits. If your modified adjusted gross income (MAGI) is less than $70,000 ($140,000 if filing jointly), you can claim the full deduction. If your MAGI is between $70,000 and $85,000 (or between $140,000 and $170,000 if filing jointly), you can claim a reduced amount. If your MAGI is over $85,000 (or over $170,000 if filing jointly), you cannot claim this deduction. Note that you cannot deduct the principal payments you make on your student loans, only the interest.

Where to Put It on the Tax Form

You can claim this deduction as an adjustment to income on Schedule 1 (Form 1040), line 20.

Real World Example

For example, if you paid $3,000 in student loan interest in 2020, you can deduct $2,500 on your 2020 federal income tax return. If your MAGI is $75,000, your deduction will be reduced. If your MAGI is $85,000 or more, you cannot take the deduction.

Calculation Required

A calculation is required for this deduction.

If your MAGI is within the phase-out range, you must reduce your maximum deduction of $2,500. The IRS provides a worksheet in Publication 970 to calculate the reduced deduction.

Audit Risk & Documentation Tips

The risk of audit for this deduction is relatively low. However, you should keep records of your student loan interest payments. Your lender should provide you with Form 1098-E, Student Loan Interest Statement, if you paid $600 or more in interest during the year.

IRS Reference

IRS Publication 970, Tax Benefits for Education

Relevant Industries

Individual TaxpayersStudentsFreelancersSmall Business

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 3, 2025

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