Student Loans – Interest Paid
You may be able to deduct interest you pay on a qualified student loan. Generally, the amount you may deduct is the lesser of $2,500 or the amount of interest you actually paid.
You can claim the deduction if all of the following apply:
* You paid interest on a qualified student loan in tax year 2012
* You are legally obligated to pay interest on a qualified student loan
* Your filing status is not married filing separately
* Your modified adjusted gross income is less than a specified amount which is set annually, and
* You and your spouse, if filing jointly, cannot be claimed as dependents on someone else's return
There are several different options for the Education Credit this year. The American Opportunity Credit, Hope Credit, Lifetime Learning Credit, Tuition and Fees Deduction, and Student Loan Interest Deduction.