Tax Deductions
Another way to save money is with Tax Deductions. It's probably a good idea to understand the tax laws regarding student loan deductions and credits, so you can get more money back on your tax return.
If you're making payments on your student loans:
You may be eligible to deduct the interest you pay on your student loan. Your lender/servicer is required to give you the amount of interest you've paid at the end of the year.
Deductions + Credits = less tax = bigger refund
Tax Credits - If you're still in school:
You may be eligible for either the Hope Credit or the Lifetime Learning Credit. To be eligible for the Hope Credit, you must be getting a degree and enrolled at least half-time. The maximum credit is $1500 and can only be claimed within the first two years of study. The Lifetime Learning Credit is available for all the years you're in school and you don't have to be getting a degree to receive this credit. The maximum amount for the Lifetime Learning Credit is $1000 per tax year and the credit is available if you are enrolled in at least one course.
Information that you'll need:
- Your total education cost, including tuition, books, fees, transportation, etc
- The interest that you paid (if any)
- Enrollment information
- As well as bank statements and receipts of purchases and charitable donations
For more information visit the Internal Revenue Service’s website |
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