Question

Leslie, who is single, finished graduate school this year and began repaying her student loan. The proceeds of the loan were used to pay her qualified higher education expenses. She has not received any type of educational assistance or scholarships. The amount of interest paid during the year amounted to $3,800. What is the amount and classification of her student loan interest education deduction if her modified AGI is $40,000?

Answer 1

Answer:

$2,500 from AGI

Explanation:

Given:

Adjusted Gross income = $40,000

Amount of interest pay = $3,800

According to the federal law of deduction from income tax, passed out students can take a deduction from their annual AGI payment up to $2,500, but to avail, this deduction students income must be under in specified range.

Modified Adjusted Gross income under this law must be less than $80,000.