Student loan interest that’s been paid by your or someone else

Back in the day, if parents or anyone else paid back a student loan that a student had to incur, there was no such thing as getting a tax break for that. So to get any kind of deduction, the law decided that you had to be both liable for the debt, and pay it yourself.

But now, things have changed, and there’s a small exception. You know that you have to be eligible to take a deduction, but even if someone else paid for the loan, the IRS will see it as if they landed you the money, and then you paid the debt yourself.

In conclusion, a student who’s not registered as a dependent can easily qualify to deduct as much as $2,500 of student loan interest that’s been paid by you or someone else.