This year Riley files single and reports modified AGI of $76,000. 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 $1,200
B)The deduction for qualifying education interest is $1,000
C)The deduction for qualifying education interest is $720
D)The deduction for qualifying education interest is $200
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

The deduction for qualifying education interest begins to phase out for single filers with a modified AGI of $70,000 and is completely phased out at $85,000. Given Riley's modified AGI of $76,000, they are within the phase-out range. The maximum deduction of $2,500 is reduced in this range, and based on the provided information, the calculated deduction is $720.

This Year Riley Files Single and Reports Modified AGI of $76,000