What are the tax benefits of student loan repayment?

Tax benefits of student loan repayment in Alaska can include deductions from the overall tax burden that an individual or family owes on their annual taxes. These deductions include student loan interest deductions for those who earned less than $85,000 in the previous calendar year, as well as deductions for tuition and fees for those who earned less than $80,000. For instance, if an individual earned $75,000 in 2020, they would be eligible for a deduction of up to $2,500 for student loan interest payments they made during the tax year. Another tax benefit of student loan repayment is the SALT (State and Local Tax) deduction, which allows taxpayers to deduct up to $10,000 worth of qualifying taxes paid at the state and local levels. This includes state and local property taxes, as well as qualifying classifications of income tax. The SALT deduction amount is limited for those with incomes greater than $80,000 for individuals and $160,000 for married couples filing jointly. Alaska residents may also be eligible to claim the Lifetime Learning Credit, which allows individuals to claim up to a $2,000 tax credit for each qualifying student loan repayment. The Lifetime Learning Credit is available to all taxpayers regardless of their income level, and it is available for four tax years following the year in which the student loan is paid off. Finally, Alaska offers a student loan forgiveness program for eligible borrowers who have made at least 24 payments on their student loans. This program allows borrowers to have up to the lesser of $17,500 or 25% of the principal and interest balance of their loan forgiven. In summary, there are several tax benefits available to those who are making student loan payments in Alaska. These include deductions for student loan interest payments, tuition and fees, State and Local Taxes (SALT) deduction, Lifetime Learning Credit, and the student loan forgiveness program.

What are the tax benefits of student loan repayment?

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