How to Write Off Student Loans

Student loans can source for tax deductions.

Although nobody wants them, student loans are often a necessary evil to help pay for higher education. Depending on where you go to school and for how long, your student loans might vary from just a few thousand dollars to more than $100,000. When you start paying the loans off, you are primarily paying the interest, and the interest payments can be written off on your income tax.

Instructions

1. Wait to receive your year-ending balance statement from your student loan company. You should receive this after the first of the year; however, because of the amount of people who receive student loans, you might not receive your paperwork for several weeks. If you pay your student loans online, you can view and print your year-end balance.

2. Look through the year-end balance to find the amount of interest you paid on your student loans. You can only deduct the interest portion of your student loans from your taxes.

3. Input this amount when filling out your tax forms in the area where you can itemize your deductible expenses (such as charitable donations). Using a tax preparation program such as Turbo Tax might help you through the write-off/deduction process.

4. Subtract the amount of student loan interest from your overall income, and you are left with your taxable income. Although you won't receive all the interest back in your tax return, it might be a component that results in a tax refund.

References

• Kiplinger: Deduct Student Loans