2nd Quarter 2019

Tax Breaks When You’re Starting Out

Lower your taxes and keep more of your money by making the most of special tax breaks when you’re starting out.

Student-loan interest deduction. You can deduct up to $2,500 in student-loan interest if your modified adjusted gross income in 2019 is less than $70,000 if single or $140,000 if married filing jointly (and a partial deduction up to $85,000 for singles or $170,000 for joint filers).

Lifetime learning credit. If you take classes at an eligible educational institution, you could qualify for a tax credit worth up to $2,000, calculated as 20% of up to $10,000 spent annually on tuition and fees. To qualify for the full credit, your income must be less than $57,000 for single filers or $116,000 for joint filers (with partial credit up to $67,000 for single filers or $136,000 for joint filers). See IRS Publication 970 at www.irs.gov for details.

Retirement saver’s credit. If you contribute to a 457, IRA or other retirement-savings plan, you may be eligible for a tax credit worth between $200 and $1,000. To qualify, your adjusted gross income must be less than $32,000 if single, $48,000 if filing as head of household, or $64,000 if married filing jointly. For more information, see www.icmarc.org/saverscredit.

Return to top