Case Study 7: Deduction Limits

Rick, who files as Head of Household, paid $2,650 in qualified interest on his student loan. His total income on Form 1040 is $35,000. He has no other adjustments.

Rick is entitled to deduct $2,500 in interest paid on student loans. Rick's MAGI is below the phase-out range, so he is entitled to the maximum $2,500 deduction.

Click here to see Rick's completed Student Loan Interest Deduction Worksheet.