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I also noticed while doing taxes that if I borrow money, I'm going to pay interest on that money I borrow. One of the incentives to this self investment is that
by kin 11y ago
I also noticed while doing taxes that if I borrow money, I'm going to pay interest on that money I borrow. One of the incentives to this self investment is that I can deduct the interest that I pay.
However, apparently, if your salary is above a certain threshold, you don't qualify for education deductions and credits.
It's a first world problem, I know, but I just found out and it kind of sucked.
- Unklejoe 11y agoThe same thing happened to me. I think they phase you out of the student loan interest deduction after you pass $65,000 taxable income. I'm actually going to increase my 401k contribution to try to retain more of that deduction.
- relaytheurgency 11y agoI did not know this. I guess I will be doing the same or starting an IRA.
- relaytheurgency 11y agoYou can only deduct 2,500 dollars of student loan interest (Hilariously, even if you're married this doesn't go up. My spouse has no student loans, but I still can only deduct 2,500 filing jointly). When I went back to school to finish my degree I put my loans into deferment, so now I am paying a bunch of interest back. Seems like a shitty situation. Before I got my degree I was making less than a third of what I make now, even though I worked more and got paid overtime. That was at a job I had worked at for five years and was likely maxed out of earning potential in that industry. I made little enough to have almost no federal tax burden. By providing loans the government has essentially turned a tax burden into a revenue generator. In just two years I am making this much more money, paying a bunch more in taxes, and my lifetime earning potential has increased significantly. But they still try to screw you from both ends, of course.