The other shoe dropped for student loan debtors last year as the president’s forgiveness program ended abruptly, so you or your child may have resumed payments.

Strategy: Seize the deduction for student loan interest paid in 2023. This deduction is claimed above-the-line, so it reduces adjusted gross income (AGI), which can make the taxpayer eligible for certain other federal income tax breaks. However, the write-off is phased out for higher-income taxpayers. Therefore, if your name is on the loan papers, and not your child’s, you may not qualify for the student loan interest deduction.

Here’s the whole story: The annual deduction is limited to the first $2,500 of qualified student loan interest. This includes loans to cover tuition and fees, room and board, books, supplies, equipment and other necessary expenses, such as transportation. The loan proceeds can be used for your own education or schooling of your spouse or a dependent if the student is enrolled on at least a part-time basis. You qualify for the deduction only if you meet these five requirements: 1. You paid interest on a qualified student loan in the tax year. 2. You are legally obligated to pay interest on a qualified student loan. 3. Your filing status is not married filing separately. 4. You or your spouse, if filing jointly, can’t be claimed as dependents on someone else’s tax return. 5. Your modified adjusted gross income (MAGI) is not so high that the deduction is completely phased out. For 2023 returns, the MAGI phase-out range is $75,000 to $90,000 for unmarried individuals and $155,000 to $185,000 for married joint filers. Once you exceed the upper threshold, no deduction is allowed. Tip: Another student loan forgiveness program is being implemented in 2024.