Student Loan Interest Deduction
The Taxpayer Relief Act of 1997 introduced several tax incentives including a deduction for the interest paid on qualifying student loans. Beginning January 1, 1998, taxpayers who have taken loans to pay the cost of attending an eligible educational institution for themselves, their spouse, or their dependent generally may deduct interest they pay on these student loans. The maximum amount of a deduction in one year is: $2,000 in 2000 and $2,500 in 2001 and beyond. There are also limits to your adjusted gross income, which may affect the amount of deduction you may take. Brown provides borrowers with a 1098-E which indicates the amount of interest that may be deductible for Perkins and Brown institutional loans. All lenders are required to provide borrowers with a 1098-E if they paid more than $600 in interest for any tax year. If you have questions about how much interest you can deduct, you should consult with a qualified tax professional or contact the IRS Taxpayer Assistance line at (800) 829-1040.
Additional information about Educational Tax Incentives can also be obtained on the web at... http://www.irs.ustreas.gov/individuals/article/0,,id=96341,00.html.
For further information, see IRS Publication 970 - Tax Benefits for Education.