Tax Tuesday: Can I deduct student loan interest?

Now that kids are heading back to school, we’ll be featuring some tax-saving tips and interesting articles on ways you may be able to save money while your children get the education they deserve.

Can I deduct student loan interest?

Since personal interest is generally non-deductible, deductions must meet several tests:

1. You must be the person liable on the debt and the loan must be for education only (not an open line of credit).
2. Your income can't exceed $150,000 in 2011 on a joint return or $75,000 in 2011 (Same limits applied in 2010) on a single return; married couples filing separately cannot deduct.
3. You can't deduct if you're claimed as a dependent.
4. Deduction ceiling is $2,500.