The IRS allows you to write off some of the interest payments you'll make on your student loans. Although it sets limits on how much you can write off on qualified education loans, the deduction you make counts as an adjustment to income, reducing your tax liability.
Wait to receive your year-end 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 the principal and interest paid during the year.
Look at the year-end statement to find the amount of interest you paid on your student loans. You may receive a Form 1098-E from your lender, or be able to print this form online, which reflects the amount of interest you paid for that tax year. You can only deduct the interest portion of your student loans from your taxes.
Complete a worksheet on page 36 of the 2013 Form 1040 Instruction booklet to determine the deductible amount to enter on line 33 Form 1040. There are income limits depending on your filing status of the tax deductible amount.
The maximum amount of deductible student loan interest is $2,500, as of the date of publication. The principal amount of student loans repaid is not tax deductible.
Things You'll Need
Instructions for Form 1040 booklet