How to save money during tax season if you pay student loans

Deduct interest on federal income tax

AP Image
AP Image

SAN ANTONIO – If you’re paying interest on student loans, you could qualify to reduce the amount you pay in income tax.

The 1098-E tax form lists the amount of interest you pay on your student loans every year.

READ: Why colleges with billions of dollars still charge tuition

Only people who pay more than $600 in interest on student loans in one calendar year qualify.

If you're married filing separately -- or for 2015 if your modified adjusted gross income, or MAGI, is $80,000 or more if filing single or $160,000 if married filing jointly -- you can't deduct any student loan interest, according to Turbotax.com.

The maximum amount of interest you can deduct is $2,500, even if you paid more.

You don’t need a physical copy of your 1098-E to apply for the deduction. 

About the Author: