How To Benefit From A Student Loan Interest Deduction

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How to Benefit From a Student Loan Interest
Deduction?
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• Being a student with a loan can be a huge hassle,
  but with the student loan interest deduction you
  can make it less of one.

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• With the student loan interest deduction you can
  use it for up to 2,500 of the interest you might
  have paid on your loan and its interest. One
  exception is with student loans that may be
  nullified in that case you can completely
  exclude the total from your income.

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• When it comes to the Education Loan Interest
  reduction it has to be claimed on a loan that was
  to pay for qualified higher education programs
  only. On the other hand it can be one used for
  you, your spouse or your kids, meaning any
  dependents.

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• Claiming things such as fees, tuition, supplies,
  equipment, room and board and transportation can
  be done when claiming a loan interest reduction.
  It can be used for a college, university or even
  a vocational school. A couple other things to
  take into consideration when looking into the
  interest deduction is that the student must be at
  least a half-time student in a degree,
  certificate, or any other qualified program, as
  long as you are legally obligated to pay it back.

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• There are a few things you should realize though
  before claiming interest reduction that may
  affect whether or not you qualify. These include
  if another person can claim you as a dependent,
  you are married but file separately, for any
  reason you are not legally allowed to clear the
  loan or a relative took out the loan. All of
  these can mean you cannot qualify for the
  deduction.

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• Something else you may want to know before trying
  to qualify for the deduction is that there are
  some instances where costs may be incurred and
  have to be reduced. This occurs when there are
  non-taxable distributions from a Coverdell
  education savings account, or from a qualified
  tuition program, if there is interest from US
  Savings Bonds that are non-taxable, parts of
  scholarships and fellowships that are
  non-taxable, any kind of veterans education
  assistance and any non-taxable amounts (excluding
  gifts, bequests or inheritances). Make sure you
  check into any connection to any of these things
  before applying for a student loan interest
  deduction.

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• One last thing that should be considered is if
  you are paying on any loans after 2002, you have
  a different option in claiming payments for the
  reduction. This is because the "first 60 months"
  requirement on interest is no longer part of loan
  agreements after this date. This allows for
  deductions on voluntary interest payments,
  instead of only on required ones.

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• Having the option to save on student loans and
  the interest they incur, can greatly help a lot
  of families who want to give their children a
  better education and future. By taking advantage
  of the loan interest reduction they are allowing
  themselves the chance to do just that.

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