For those saddled in student loan debt, make sure you pay extra attention when doing your taxes this year as you could be missing out on valuable cash. Stephen Dash, founder of Credible, a multi-lender marketplace for student loans, talked to FOXBusiness.com about what student loan borrowers need to know for tax season.
If You’re Single
A borrower can deduct up to $2,500 on student loan interest. Dash says that if you’re on the 25% tax bracket, the deduction is $625 and $375 if you’re on the 15% tax bracket.
For the 2015 tax year, those with student loan debt must have paid interest on a student loan bill, have the loan in their name and have been enrolled in school at least half the time since the loan was taken out.
And, single borrowers have to have an adjusted income of less than $80,000 and no one can claim them as a dependent.
If You’re Married
When both parties in a marriage are paying student loan debt and filing jointly, the maximum deduction that can be claimed is $2,500. According to Dash, if you’re married and filing separately, you can’t claim the deduction at all.
However, filing jointly as a married couple can affect income driven repayment plans, which tie monthly bills to salary. Suddenly having two incomes can make an income repayment plan unaffordable as the cost skyrockets.
How to Claim Qualified Educational Expenses
For textbooks and other academic fees, student loan borrowers can claim a credit. If a borrower qualifies, the credit is on the first $2,000 of eligible higher education expenses. If your qualifying expenses total over $4,000, this will get you a credit of $2,500 according to Dash.