Quote:
Originally Posted by O.city
It's deductible up to a certain point. I think IIRC, the max is 10k per year.
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That didn't sound right, so I looked it up. Its $2500 per return. Phaseouts for MFJ start at 135,000.
So if he's got 90,000 @ 6.5%, that would be in the ballpark of $5,850 yearly, so he'd be limited out.
I have no idea what his effective tax rate is, but if it is 20%, he'd be saving $500 on the student loan interest deduction, so it sure is nice, but it isn't a giant deal one way or the other.
That's a little bit down in the weeds. If you have any questions, shoot. The big deal is that if it is in a retirement fund already, don't distribute it until you know what you're doing.