The Student Loan Interest Deduction allows you to deduct up to $2,500 of interest you paid on qualified student loans each year, which can lower your taxable income even if you don’t itemize deductions. You may qualify if the loan was taken out for you, your spouse, or your dependent, and the funds were used for approved education expenses such as tuition, books, and required supplies.
You must also meet yearly income limits, and you cannot claim the deduction if you’re married filing separately or if someone else can claim you as a dependent.
Only interest actually paid during the year counts, not the loan’s full balance, and you’ll typically receive Form 1098-E from your loan servicer showing how much interest you paid. Both federal and private student loans may qualify as long as they were taken out solely for education.
To qualify for this deduction you don’t need to itemize deductions; forgiven loans don’t qualify, and paused or deferred loans count (only if you actually paid interest during the year).
Overall, the Student Loan Interest Deduction is a valuable tax benefit for borrowers looking to reduce their tax bill while paying off student debt.
For more information click in this link: IRS.gov