On your 2008 tax return, you may be able to deduct up to $2,500 of the interest you paid on a qualified student loan for yourself, your spouse or your dependent. Generally, you can claim the deduction if all of the following requirements are met.
1. Your filing status is any filing status except married filing separately.
2. Your modified adjusted gross income is less than $70,000 for single, head of household and qualifying window (er) ($145,000 for married filing joint return).
3. No one else is claiming an exemption for you on their 2008 tax return.
You paid interest on a loan taken out only to pay tuition and other qualified higher education expenses for yourself, your spouse, or your dependent when the loan was taken out. The term dependent includes someone you could have claimed as a dependent for the year the loan was taken out except that:
1. The person filed a joint return,
2. The person had gross income that was equal to or more than the exemption amount for that year ($3,500 for 2008), or
3. You could be claimed as a dependent on someone else's return.
Qualified Loan
The loan is not from a related person or borrowed under a qualified employer plan or a contract purchased under such a plan. The education expenses were paid or incurred within a reasonable period of time before or after the loan was taken out. The person for whom the expenses were paid or incurred was an eligible student. However, a loan is not a qualified student loan if any of the proceeds were used for other purposes.
Qualified Education Expenses
Qualified higher education expenses generally include tuition, fees, room and board, and related expenses such as books and supplies"
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