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Life Events


Every stage of life has its own financial needs and concerns. The life events on this page can help you target the key financial strategies and issues that are likely to be most important to you in this stage of your life.

Starting Out    Starting a Family    Planning/Saving for Retirement    Long-Term Care Planning    Planning an Estate    Nearing Retirement/Retirement    Loss of Spouse    Financial Windfall   
 
Is student loan interest deductible?

You may be able to deduct all or part of the student loan interest you've paid during the year, assuming you meet the requirements. You may be able to deduct up to $2,500 each year from your gross income if you've paid interest on a qualified education loan for qualified higher education expenses during the year.

To be eligible for the deduction, your modified adjusted gross income (MAGI) must fall below a threshold figure. For 2019, the deduction begins to phase out as your MAGI exceeds $70,000 if you're single or $140,000 if you're married and file jointly. It phases out completely when your MAGI exceeds $85,000 ($170,000 for married persons filing jointly). These amounts are indexed for inflation. No deduction is allowed if your filing status is married filing separately.

Generally, a qualified education loan is a debt you incur to pay qualified higher education (undergraduate and graduate) expenses for yourself, your spouse, or a dependent at an eligible educational institution in a program that leads to a degree. The IRS provides specific requirements regarding the definitions of both an eligible educational institution and qualified higher education expenses. To qualify for the deduction, you must have been enrolled in the institution at least half-time at the time of the loan.

If you are claimed as a dependent, you may not take the deduction. If you are a dependent and your parent borrows money to pay for your college tuition, he or she may claim the student loan interest deduction.

For additional details, see IRS Publication 970 and/or consult a tax professional.



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Non-deposit investment products and services are offered through Sorrento Pacific Financial, LLC ("SPF"), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through SPF: are not FDIC or otherwise federally insured, are not a deposit or guarantee of the bank, and may involve investment risk including possible loss of principal. Investment Representatives are registered through SPF. The Bank has contracted with SPF to make non-deposit investment products and services available to bank clients.

Before deciding whether to retain assets in an employer sponsored plan or roll over to an IRA an investor should consider various factors including, but not limited to: investment options, fees and expenses, services, withdrawal penalties, protection from creditors and legal judgments, required minimum distributions and possession of employer stock.

For specific tax advice, please consult a qualified tax professional.

 

 


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