Two-thirds of students graduating college in 2016 are carrying student loan debt, averaging close to $30,000 and typically carrying interest at 6.8 percent, or a little over $2,000 per year.
If you are paying more than $2,500 per year in student loan interest, the excess is not deductible and cannot be carried forward. Also, if you are making more than $65,000 per year, the deduction begins to phase out, and if you are making $80,000 per year, the deduction disappears altogether.
If you are trying to qualify for an income-based student loan repayment plan, you may want to consider filing separately, especially if your spouse does not also have student loan debt, so his or her income will not be taken into account in setting the repayment rate.
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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