Student loan is something that you must be paying once you start working, just like what many other graduates face. Many college students getting their degree rely on student loans to finish their studies. There are ways on how you could get tax deductions if you’re still paying for your student loan. The exemption that you would get could help in paying for your loan. Here are some of the tax deductions that you could take advantage of when filing for your tax return.
Deduct the Interest on Your Loan
Depending on the amount of interest that you’ve paid on your loan, you could get up to $1,200 exemption on your tax. There’s also a ceiling on the income that you make per year. This amount regardless if you get the maximum deduction or not would still help in the payment of your debt. However, this is not recommended if you’re still going to school since the interest would just be added to your initial loan and you would end up paying more.
Apply for the Earned Income Tax Credit
This was made for low income earners, whether single or married. If you’re married and your spouse also has a student loan to pay, only one of you should apply since you will be disqualified if both of you applied. The amount of income to qualify for this varies for single and married individuals. Check to see if you qualify for this and take advantage of it. Not everyone who qualifies claim it. In fact, 20% of those who do are not making a claim.
Take Advantage of the Child and Dependent Care Credit
If you are caring for a child, you could qualify for a credit of up to $3,000 or up to twice this amount if you’re caring for two children. There’s no maximum amount of income on this. However, you should be employed or looking to be employed in order to qualify for the child and dependent care credit. You must give your child care provider’s information for the processing of your claims. If you’re still going to school and you do this full time, you would be in the employed category, so you’ll still qualify for this.
Work as a Freelancer
As a freelancer, you could earn extra money from the work that you do. Not only that, you could get deductions on the expenses that you have that has to do with your job. This includes your snacks, meals, laptop and other things that you use for your work.
Get Tuition and Fees Deductions
You could only get this if your income meets the qualification and you are not applying for other deductions related to education. You would also not be qualified if you’re married and your spouse is applying for a separate deduction or you’re a dependent of someone who’s also claiming their own tax return. The deduction that you could get is up to $4,000 a year.
Preparing for your tax return could be challenging, especially if you’re not yet that familiar with it. If you belong to those who earn low incomes, you could get help from volunteers in the community college in your area for the preparation of your tax return.
Featured and 1st image by College of Business and Technology (College of Business and Technology) [Copyrighted free use], via Wikimedia Commons
2nd image by Greg Henshall (This image is from the FEMA Photo Library.) [Public domain], via Wikimedia Commons