This article was provided by Laurel Road, a student loan refinancing company and an approved IAW benefit partner, and contains links to advertising content.
It’s tax season, and hopefully, for you, that means getting some of the hard-earned money you made the year before, back into your pocket – and if you’ve paid interest on student loan debt, you may.
Each year, when you file your taxes, you can deduct the interest that you paid on student loans the year prior. Depending on how much you earned, how you file your taxes, and how much interest you paid, you can get money back in your pocket at the top of the year. However, the yearly interest deduction cap is $2,500 and you can’t get money back for interest payments of more than $2,500. Here are some other stipulations:
1. You must have paid interest on student loans during the tax year.
2. You cannot earn more than $80,000 per year ($160,000 if married).
3. You cannot be claimed as a dependent on someone else’s tax return.
4. Your filing status cannot be married filing separately.
With the income stipulations, you may not qualify for the student loan deduction, so what now? Student loan refinancing can be a great way to save on your student loan debt, especially if you don’t qualify for the student loan interest tax deduction. Laurel Road customers save more than $20,000 on average over the life of their loan.
If you refinance your student loans, you may be able to reduce your monthly payments and save all year long not just at tax time. Learn more about Laurel Road student loan refinancing here.
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Average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Laurel Road Bank does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Please consult your own tax, legal and accounting advisors before engaging in any transaction.
Free Webinar: A Strategic Approach to Managing Student Loan Debt
Laurel Road, the endorsed student loan refinancing provider of the International Association of Women hosted a free online think session about Student Loan Best Practices for women. The goal – to delve into the loan repayment options professionals have to choose from. The interactive webinar is now available for replay.
