If you are paying down your student loans, save money come tax time (right now) by taking the Student Loan Interest Deduction. This is a great tax break to take advantage of because it is an above the line adjustment to income. That means you don’t have to complicate your taxes by itemizing. Basically you subtract the interest you paid on the loans directly from your income. It’s like you never earned that money, so you don’t have to pay taxes on it.
My refund was about $150 more thanks to this. If you are a Turbo Tax user, have no fear the software knows all about it and will ask you for the appropriate information. You should have received a 1098-E from your lender. If it’s a government loan you can get the form from your online account. Of course there are income restrictions and this and that, so look at the details closely to see if you apply.
*Disclaimer: The information contained here is general in nature and is not intended as legal, tax or investment advice.