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in 2019, Donna, who is single, finished graduate school and began repaying her student loan. The...

in 2019, Donna, who is single, finished graduate school and began repaying her student loan. The proceeds of the loan were used to pay her qualified higher education expenses and she never had any type of educational assistance or scholarships excluded from her income in the past. the amount of interest paid during the year amounted to $3,000. What is the amount of her student loan interest deduction if her AGI is $73,000?

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Answer #1

Answer:

Maximum student loan interest deduction allowed is $2,500 subject to phase out.

For 2019 (for filing status Single):

Phase out range is AGI of $70,000 to $85,000

Deductible amount = (85000 - 73000) * 2500 / (85000-70000) = $2,000

Amount of her student loan interest deduction = $2,000

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