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Student loan interest is an adjustment ("deduction") to gross income not a credit. 2016 - $2,500 for the year max deduction, so based on your tax rate you can c
by hahla 10y ago
Student loan interest is an adjustment ("deduction") to gross income not a credit. 2016 - $2,500 for the year max deduction, so based on your tax rate you can compute how much your real "savings" are. I wouldn't necessarily think of this as a shield against higher taxes.. the amount is marginal based on the tax bracket your in.
- lettergram 10y agoTotally agree $2500 isn't much, but when you couple it with the fact I make more money on my investments than I do from paying down my loan (plus interest), it would actually cost me a lot more potential earnings paying down my loan.
- planteen 10y agoI thought the same thing. My strategy was just to pay down loans as quickly as possible before putting money in stocks outside of retirement accounts. A flat year in the market doesn't make the OP's strategy worth it, not to mention a decline. Even in a really good year, $2500 isn't a huge amount to offset gains.