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Deduction for Student-Loan Interest
There is a deduction for interest on college-education loans — as long as you don't earn "too much" money. The write-off has its limits: $1,500 for 1999; $2,000 for 2000; and $2,500 for 2001 and later years. Only interest required to be paid during the first five years of the loan is deductible. The deduction is phased out for joint filers with adjusted gross incomes (AGIs) between $60,000 and $75,000, and for singles with AGI between $40,000 and $55,000.
No write-off is allowed for married individuals who file separately.
You can take advantage of this tax break even if your AGI exceeds the limit. Borrow money in your child's name. Chances are your child won't be making more than $40,000 his/her first year out of college. And as long as he or she is not listed as a dependent on your tax return, they can claim the tax deduction
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