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In reply to the discussion: Why Many Americans Are Shocked by Their Trump Tax Refund [View all]Honeycombe8
(37,648 posts)31. The student loan deduction is still there. $2,500 cap per return.
That was true before the tax cut bill, and after. It's treated as an adjustment to income, which was the way it was in 2017, too.
https://www.thebalance.com/student-loan-interest-deduction-3193022 :
The Federal Student Loan Interest Deduction
Interest Paid on Student Loans Is Still Tax Deductible
It was initially believed that this lucrative tax break for students would disappear effective 2018 with the passage of the Tax Cuts and Jobs Act (TCJA) at the end of 2017. An early version of the tax bill did indeed include a provision to do away with the student loan interest deduction. Fortunately, many congressmen listened when students, colleges, and universities protested in significant numbers.
The final version of the TCJA pulled the deduction back into the fold. It's still alive, well, and available in 2018.
You can deduct interest on student loans paid by you, or by your spouse if you file a joint return. You can't claim the student loan interest deduction if you file a separate married return. You must use the single, head of household, qualifying widow(er), or married filing jointly filing status to claim it, and you can't be claimed as a dependent on anyone else's tax return.
(SNIP)
The most student loan interest you can claim as a tax deduction is limited to $2,500 as of the 2018 tax year. This limit hasn't changed from the 2017 tax year.
The deduction is also limited by your incomeit's reduced for taxpayers with modified adjusted gross incomes (MAGIs) in a certain phase-out range and it's eventually eliminated entirely if your MAGI is too high. See the chart below for the exact income limits that apply. They depend on your filing status.
The Student Loan Interest Deduction Phase-Outs
The phase-out ranges for the 2018 tax year are:
Filing Status Phase-out Begins Phase-out Ends
Married Filing Jointly 135,000 165,000
Qualifying Widow(er) 65,000 80,000
Head of Household 65,000 80,000
Single 65,000 80,000
Interest Paid on Student Loans Is Still Tax Deductible
It was initially believed that this lucrative tax break for students would disappear effective 2018 with the passage of the Tax Cuts and Jobs Act (TCJA) at the end of 2017. An early version of the tax bill did indeed include a provision to do away with the student loan interest deduction. Fortunately, many congressmen listened when students, colleges, and universities protested in significant numbers.
The final version of the TCJA pulled the deduction back into the fold. It's still alive, well, and available in 2018.
You can deduct interest on student loans paid by you, or by your spouse if you file a joint return. You can't claim the student loan interest deduction if you file a separate married return. You must use the single, head of household, qualifying widow(er), or married filing jointly filing status to claim it, and you can't be claimed as a dependent on anyone else's tax return.
(SNIP)
The most student loan interest you can claim as a tax deduction is limited to $2,500 as of the 2018 tax year. This limit hasn't changed from the 2017 tax year.
The deduction is also limited by your incomeit's reduced for taxpayers with modified adjusted gross incomes (MAGIs) in a certain phase-out range and it's eventually eliminated entirely if your MAGI is too high. See the chart below for the exact income limits that apply. They depend on your filing status.
The Student Loan Interest Deduction Phase-Outs
The phase-out ranges for the 2018 tax year are:
Filing Status Phase-out Begins Phase-out Ends
Married Filing Jointly 135,000 165,000
Qualifying Widow(er) 65,000 80,000
Head of Household 65,000 80,000
Single 65,000 80,000
Turbotax:
When to deduct student loan interest
The student loan interest deduction is taken as an adjustment when calculating your adjusted gross income, or AGI. This means you don't have to itemize your deductions to take it.
To qualify, the interest payments you make during the year must be on a student loan that you took out to put yourself, your dependents or spouse through school. If you're married filing separately, or for 2018 if your modified adjusted gross income, or MAGI, is $80,000 or more if filing single or $165,000 if married filing jointly, you can't deduct any student loan interest. Your MAGI is essentially your total income minus the other adjustments you take, except for the tuition, student loan and domestic production activities deductions.
When you use TurboTax to prepare and file your taxes, you dont need to do any of these calculations on your own. Well ask you questions in plain English, handle all the calculations, and put all of your answers on the appropriate tax forms.
How much interest is deductible
If you're eligible to deduct student loan interest, TurboTax will put your information into Form 1040 to write it off. Have your 1098-E forms available when preparing your return to determine your total student loan interest paid. You can also add student loan interest payments you made that aren't reported on Form 1098-E to this total as long as the interest is paid on a qualified loan. Regardless of how much interest you paid, the maximum you can deduct is $2,500.
The student loan interest deduction is taken as an adjustment when calculating your adjusted gross income, or AGI. This means you don't have to itemize your deductions to take it.
To qualify, the interest payments you make during the year must be on a student loan that you took out to put yourself, your dependents or spouse through school. If you're married filing separately, or for 2018 if your modified adjusted gross income, or MAGI, is $80,000 or more if filing single or $165,000 if married filing jointly, you can't deduct any student loan interest. Your MAGI is essentially your total income minus the other adjustments you take, except for the tuition, student loan and domestic production activities deductions.
When you use TurboTax to prepare and file your taxes, you dont need to do any of these calculations on your own. Well ask you questions in plain English, handle all the calculations, and put all of your answers on the appropriate tax forms.
How much interest is deductible
If you're eligible to deduct student loan interest, TurboTax will put your information into Form 1040 to write it off. Have your 1098-E forms available when preparing your return to determine your total student loan interest paid. You can also add student loan interest payments you made that aren't reported on Form 1098-E to this total as long as the interest is paid on a qualified loan. Regardless of how much interest you paid, the maximum you can deduct is $2,500.
https://turbotax.intuit.com/tax-tips/college-and-education/what-is-a-1098-e-student-loan-interest/L8Tr1X9hD
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Also, there are people whose situations didn't change at all but they're paying now.
forgotmylogin
Apr 2019
#12
"Drop in withholdings"? Oh, you mean the amt the employer withheld from paycheck.
Honeycombe8
Apr 2019
#7
Even the lower earnings categories got a small tax cut, in the bracket rate.
Honeycombe8
Apr 2019
#23
True. The property tax cap hit upper middle class, or those in high-tax states.
Honeycombe8
Apr 2019
#33
Yes. The Repubs have been after mortgage interest & prop tax deductions for YEARS...
Honeycombe8
Apr 2019
#37
I was beginning to wonder if that was the plan. If the withholding was intentionally too little.nt
Honeycombe8
Apr 2019
#24
You were correct. He was able to deduct t $800 of $6000 in interest payments.
sinkingfeeling
May 2019
#38