This year Riley files single and reports modified AGI of $71,000. Riley paid $1,200 of interest on a qualified education loan. What amounts can Riley deduct for qualifying education interest?
A) The deduction for qualifying education interest is $720.
B) The deduction for qualifying education interest is $200.
C) The deduction for qualifying education interest is $1,000.
D) The deduction for qualifying education interest is $1,200.
E) None of the choices are correct.

Question

Quizplus · Accepted Answer

The deduction for student loan interest is subject to phase-out limits based on modified AGI. For single filers, the phase-out begins at $70,000 and ends at $85,000. Riley's deduction is reduced by a percentage of the amount over $70,000, resulting in a deduction of $720.

This Year Riley Files Single and Reports Modified AGI of $71,000