When you have completed this chapter, you should understand the following learning objectives: Describe the tax rules for student loan interest, be able to determine eligibility requirements and applicable dollar limits related to the Health Savings Account deduction, determine the deduction for moving expenses,. | Chapter 4 Adjustments for Adjusted Gross Income “Don’t tax you, don’t tax me; Tax the fellow behind the tree.” Senator Russell B. Long Chapter 4 - Adjustments for Adjusted Gross Income. LO #1 Student Loan Interest Only interest on a “qualified” student loan is potentially deductible. A qualified education loan is one incurred by the taxpayer solely to pay qualified education expenses incurred on behalf of the taxpayer, taxpayer’s spouse, or any dependent of the taxpayer at the time the loan was incurred. The deduction is limited to $2,500 per year. Qualified student loan interest is deductible up to $2,500 per year. A qualified loan is one that was used solely to pay education expenses on behalf of the taxpayer, the taxpayer’s spouse, or any other dependent of the taxpayer at the time the loan was incurred. LO #1 Student Loan Interest Qualified education expenses must be paid or incurred within a reasonable period before or after the loan date Expenses must occur during the period the recipient was carrying at least half the normal full-time workload for the intended course of study. The course of study can be either at the undergraduate or graduate level. Qualified education expenses must be paid or incurred within a reasonable period before or after the loan date and must occur while the recipient was carrying at least half the normal course load. The eligible expenses can be incurred at either the undergraduate or the graduate level. LO #1 Student Loan Interest The deductible amount of student loan interest is reduced when modified adjusted gross income reaches: $125,000 on a joint return ($60,000 for a single return) and: is totally eliminated when modified adjusted gross income reaches $155,000 ($75,000 for single returns). The deductible amount of student loan interest is reduced when modified adjusted gross income reaches $125,000 for a joint return and $60,000 for a single return. The deduction is totally eliminated when modified adjusted gross income . | Chapter 4 Adjustments for Adjusted Gross Income “Don’t tax you, don’t tax me; Tax the fellow behind the tree.” Senator Russell B. Long Chapter 4 - Adjustments for Adjusted Gross Income. LO #1 Student Loan Interest Only interest on a “qualified” student loan is potentially deductible. A qualified education loan is one incurred by the taxpayer solely to pay qualified education expenses incurred on behalf of the taxpayer, taxpayer’s spouse, or any dependent of the taxpayer at the time the loan was incurred. The deduction is limited to $2,500 per year. Qualified student loan interest is deductible up to $2,500 per year. A qualified loan is one that was used solely to pay education expenses on behalf of the taxpayer, the taxpayer’s spouse, or any other dependent of the taxpayer at the time the loan was incurred. LO #1 Student Loan Interest Qualified education expenses must be paid or incurred within a reasonable period before or after the loan date Expenses must occur during the period the
