July 22, 2024

Student loans paid in 2023 could be eligible for a $2,500 tax break

Millions of Americans may feel burdened after restarting student loan payments in 2023, but there may be an upside come tax season

Interest on federal student loans began accruing again on Sept. 1 and the first payments were due in October for more than 40 million Americans. If you started repaying, you may be able to take a federal tax deduction on the interest of up to $2,500. And you don’t need to itemize to take it. 

Make sure you know the income limits, who owns the loan and who’s making payments, and if your parents claim you as a dependent. That way you know who, if anyone, can take the deduction. Tripping up on any of these could reduce your tax deduction to zero. 

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