# Is student loan interest tax deductible?

Yes, within limits. For the 2025 tax year, you can deduct the lesser of $2,500 or the interest you actually paid on a qualified student loan. It is a personal adjustment to income, so you do not need to itemize, and it is not a business expense. The deduction phases out with modified AGI between $85,000 and $100,000, or $170,000 to $200,000 on a joint return. In a ProfitDrawer bookkeeping spreadsheet, loan payments belong in a non-business category.

**Who can claim it for the 2025 tax year (IRS Tax Topic 456):**

- You paid interest on a **qualified student loan** in 2025.
- You are **legally obligated** to pay the interest.
- Your filing status is **not** married filing separately.
- No one can claim you as a dependent.
- Your modified AGI is under the yearly limit.

**2025 limits (IRS Publication 970, 2025):**

| Filing status | Deduction reduced | No deduction at |
|---|---|---|
| Most filers | MAGI $85,000 to $100,000 | $100,000 or more |
| Married filing jointly | MAGI $170,000 to $200,000 | $200,000 or more |

The IRS sets the income limits each year, so check the 2026 version of Publication 970 before you file your 2026 return.

**If you are self-employed:** student loan interest goes on your personal return, not on Schedule C, and it does not lower self-employment tax. Keep it out of business profit in your books.

General information, not tax advice.

- Source: [Topic no. 456, Student loan interest deduction (IRS)](https://www.irs.gov/taxtopics/tc456)
- Updated: 2026-10-29
- Published: 2026-10-29
- Category: Small business taxes
- Canonical: https://profitdrawer.com/answers/is-student-loan-interest-tax-deductible.html
- Publisher: ProfitDrawer (https://profitdrawer.com)