"2023 Student Loan Payments May Qualify for $2,500 Tax Deduction"

Borrowers who resumed student loan payments in 2023 can potentially deduct up to $2,500 of paid interest on their federal tax return without itemizing. Eligibility for the deduction is subject to income limits, loan ownership, payment responsibility, and dependency status. For 2023, phase-outs begin at a modified adjusted gross income of $75,000 for single filers and $155,000 for joint filers. The deduction is available for interest on federal and private loans, origination fees, capitalized interest, and revolving lines of credit used for education expenses. However, interest paid by employers or from tax-free tuition plans cannot be deducted. While federal student loan forgiveness is not federally taxed, some states may tax this forgiveness.