There are various student loan options from the India & USA, for studying in USA. While most of you are already in USA, lets us tell you the tax benefits as per United States taxation norms. When you repay student loans, you’re not just paying principal amount; you’re paying interest, too. The student loan interest deduction will let you subtract your interest payments from your or parent’s taxable income
Tax Benefits in USA
1) In the USA, student loan interest benefits operates under a scheme called MAGI (Modified adjusted gross income). Under MAGI limits, the amount of student loan interest deduction from the borrower is gradually reduced, if student’s MAGI is between $65,000 and $80,000 and. Student loan borrower can’t claim the deduction if your MAGI is $80,000 or more
2) If borrower files a joint income tax with a spouse then MAGI limits falls between $135,000 and $165,000. However, if income increases more than $165,000, borrower cannot claim any deduction.
3) If borrower is still in school, the USA government offers additional education tax intervals. borrower can claim the Amercian Opportunity Credit worth up to $2,500, or the lifetime learning credit of up to $2,000. This deduction can maximum reduce the amount of your taxable income by up to $2,500 per year.
4) However, borrower qualifies for a student loan interest benefit when borrower itself, or spouse, or child enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential at an eligible educational institution.
5) Student loan interest portion comprises of loan origination fee, capitalised interest, interest on revolving lines of credit, interest on refinanced or consolidated student loan and payments between interest and principal
Nomad credit could have gone in length and probably have explained in details, However, same information keeps changing subject to change in policies by the government of respective countries.Nevertheless as being a first time borrower above charted information is good enough for students reference while taking a student loan.
Hope above article is informative.