Question

In: Accounting

Maria paid $2853 interest on a qualified student loan in 2019. He and his spouse, file...

Maria paid $2853 interest on a qualified student loan in 2019. He and his spouse, file MFJ. Their MAGI is $145000. The maximum amount of student loan interest

that they may claim is

A $3250

B $2500

C $2083

D $0

Expert Solution

The maximum amount of student loan interest that they may claim is $2083(i.e.Option C)

Explanation:-

The fixed /Standars amount of deduction for the student loan interest is lower of the following

$2500
The amount of interest paid during the tax year.

It is noted that whose Modified Adjusted Gross Income (MAGI) limit are as follows then they are still qualify for the student loan Interest deduction,based on filing status for the 2019 is

For Single $85000
For Married filing jointly $170000
For Head of Household $70000

but it is to be remember that If any one under that limit but above a certain yearly income,then the deduction will slowly phased out and any one can not able to get full amount of deduction of $2500 but only a smaller percentage of it.

Here, in the given problem Maria and her spouse file Married Filling Jointly (MFG) return so their phased out start at $140000.

Their Modified Adjusted Gross Income is $145000.then

The amount of Deduction of such claim will be calculated as follows:-

=$2500-[$2500×($145000-$140000)/($170000-$140000)]

=$2500-[($2500×$5000/$30000)]

=$2500-($2500×1/6)

=$2500-$416.67

=$2500-$417

=$2083.

ekkarill92 answered 1 year ago

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