How do I claim Above the Line Deductions for student loans on my 2025 taxes?
So I've been trying to figure out these "above the line deductions" for my taxes this year. I have my 1098-E form from my student loan provider showing I paid about $2,100 in interest last year. Everything I read online keeps referring to this as some kind of above the line deduction, but I'm totally confused about how this actually works when I'm filing my taxes. Do I just enter this somewhere on my tax forms? Does it affect both my federal and state taxes? I started filling out my return but got stuck when I reached this part. This is my second year filing with student loan payments and I think I might have missed out on this deduction last year because I didn't understand it. Would really appreciate if someone could explain in simple terms how these "above the line" deductions actually work and where exactly I enter my student loan interest.
20 comments
Join the conversation
Dmitry Kuznetsov
Above the line" deductions are adjustments to income that reduce your Adjusted Gross (Income)AGI .'They re "called above the" line because they appear above the line where your AGI is calculated on your tax return. Student loan (interest from your) 1098-E is a common above-the-line deduction. When filing,'you ll enter this on Schedule 1 of Form 1040 in "the Adjustments to" Income section. The great thing about above-the-line deductions is they reduce your AGI directly, which can qualify you for other tax benefits that have income limits. And yes, they typically affect both federal and state taxes since most states use your federal AGI as a starting point. You can deduct up to $2,500 in student loan interest, though this phases out at higher income levels. Since you paid $2,100, you should be able to deduct the full amount if'you re within the incomelimits.
0 coins
Ava Thompson
•Thank you for explaining! What are the income limits for the student loan interest deduction? I make around $75k and I'm worried I might be over the limit.
0 coins
Dmitry Kuznetsov
•For 2025, the student loan interest deduction begins to phase out for single filers with a Modified Adjusted Gross Income (MAGI) of $75,000 and completely phases out at $90,000. For married filing jointly, the phase-out range is $155,000-$185,000. So at $75k, you're right at the beginning of the phase-out range if you're single. You'll still get some deduction, but it may be reduced. The reduction is gradual - you lose a percentage of the deduction based on where you fall in that range.
0 coins
Miguel Ramos
I was really confused about above-the-line deductions too until I found taxr.ai (https://taxr.ai). Their system analyzed my 1098-E form and other documents, then told me exactly how to claim my student loan interest deduction. Apparently I had been messing this up for years and leaving money on the table! It actually walks you through exactly where to enter these deductions on your tax forms and explains how they affect your AGI. I used to get so frustrated trying to figure out if I qualified for deductions and where to put all these numbers.
0 coins
Zainab Ibrahim
•Does it work for self-employed people too? I have student loans but also run my own business and never know if I'm claiming deductions correctly.
0 coins
StarSailor
•How does it compare to TurboTax? I'm already using that but still confused about these above-the-line deductions.
0 coins
Miguel Ramos
•Yes, it absolutely works for self-employed people. It's actually really helpful for that because it can identify business expenses and self-employment deductions that you might miss. It analyzes your 1099s alongside your other documents like 1098-Es to make sure you're maximizing all possible deductions. For TurboTax users, I found taxr.ai to be more helpful because it explains WHY you qualify for certain deductions rather than just walking you through forms. It helped me understand the requirements better, and I was able to go back into TurboTax and fix some mistakes I had made. You can use it alongside TurboTax to double-check your work.
0 coins
StarSailor
Just wanted to follow up about taxr.ai since I mentioned using TurboTax earlier. I decided to try it out and wow! It found an additional $1,200 in above-the-line deductions I was eligible for that I had completely missed in TurboTax. The student loan interest was there, but I didn't realize my HSA contributions and some education expenses also qualified as above-the-line deductions. Really opened my eyes to how much I was leaving on the table with my previous filing method.
0 coins
Connor O'Brien
I had a nightmare trying to claim my student loan interest last year. Called the IRS three times for help with above-the-line deductions and spent HOURS on hold each time. Finally discovered Claimyr (https://claimyr.com) and they got me connected to an actual IRS agent in about 15 minutes who walked me through exactly how to claim my above-the-line deductions properly. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c Honestly thought it might be a scam at first but was desperate after wasting an entire weekend on hold. The IRS agent I spoke with was actually super helpful and explained that I had been calculating my AGI wrong for years because I misunderstood how to apply these deductions.
0 coins
Yara Sabbagh
•Wait, so this service just gets you through to an IRS person faster? How does that even work? The IRS phone system is notoriously awful.
0 coins
Keisha Johnson
•Sounds like BS to me. Nobody gets through to the IRS that fast. I've literally tried calling dozens of times about my student loan deduction and gave up.
0 coins
Connor O'Brien
•It uses a system that navigates the IRS phone trees and waits on hold for you. When an actual agent picks up, it calls your phone and connects you directly to them. So instead of you waiting on hold for hours, their system does the waiting. I was skeptical too, and I understand why it sounds too good to be true. But after wasting 3+ hours on hold myself multiple times, I was willing to try anything. I was shocked when my phone rang and there was an actual IRS agent on the line. The agent answered all my questions about how above-the-line deductions affect my AGI and helped me understand which forms I needed to use for my student loan interest.
0 coins
Keisha Johnson
I need to eat some crow here. After saying Claimyr sounded like BS, I decided to try it anyway because I was desperate to figure out these above-the-line deductions before the filing deadline. Got connected to an IRS agent in about 20 minutes who explained exactly how student loan interest affects my AGI and confirmed I've been filing wrong for YEARS. Turns out I was eligible for a much bigger refund than I thought because I wasn't properly accounting for these deductions. Just filed an amended return for last year too. Sometimes being wrong feels pretty good!
0 coins
Paolo Rizzo
Above-the-line deductions are awesome because you don't need to itemize to claim them! I was confused about this for years and always took the standard deduction thinking I couldn't claim my student loan interest. Such a waste! Other common above-the-line deductions besides student loan interest: - HSA contributions - Self-employed health insurance premiums - Self-employment tax (half of it) - Traditional IRA contributions - Teacher classroom expenses (up to $300) - Alimony payments (for divorces before 2019
0 coins
QuantumQuest
•Wait, teacher expenses are above the line?? I've been a teacher for 3 years and never knew that! Do you need any special forms for this?
0 coins
Paolo Rizzo
•Yes! As a teacher, you can deduct up to $300 for classroom supplies you paid for out-of-pocket. You don't need a special form - just enter it in the Adjustments to Income section on Schedule 1 of your 1040. Keep your receipts though in case of an audit. It's one of the most overlooked above-the-line deductions, especially for new teachers. This is in addition to the standard deduction, so you're not losing anything by claiming it!
0 coins
Amina Sy
For student loan interest, make sure your loan qualifies! Not all education loans are eligible for the above-the-line deduction. Private loans used for non-educational expenses won't count.
0 coins
Oliver Fischer
•How can you tell if your loan qualifies? My aunt helped pay for my school with a home equity loan and I pay her back monthly. Can I claim that interest?
0 coins
Ethan Scott
•Unfortunately, a home equity loan used for education expenses wouldn't qualify for the student loan interest deduction, even if you're using it to pay for school. The loan has to be specifically a "qualified student loan" - meaning it was taken out solely to pay for qualified education expenses and you (or your spouse/dependent) were enrolled at least half-time in a degree program. Since your aunt used a home equity loan, that's considered a different type of debt even though the money went toward education. The IRS is pretty strict about this - the loan itself has to be designated as an educational loan from the start. You'd need a 1098-E form from the loan servicer to claim the deduction, which home equity lenders don't typically provide for education-related interest.
0 coins
KaiEsmeralda
Thanks everyone for all this helpful info! I'm the original poster and this has been incredibly educational. I had no idea about the income phase-out limits or that there were so many other above-the-line deductions I might be missing. Just to clarify my situation - I'm single making about $68k, so it sounds like I should be able to claim the full $2,100 in student loan interest since I'm below the $75k phase-out threshold. I found my 1098-E form and will definitely enter this on Schedule 1 like Dmitry explained. One follow-up question though - do I need to keep any other documentation besides the 1098-E form? My loan servicer sent me some other statements throughout the year but I'm not sure if the IRS needs anything beyond that single form for the deduction.
0 coins