Education‑Related Adjustments

Education‑related adjustments reduce AGI and are available even if the taxpayer does not itemize. Two primary adjustments are the educator expense deduction and the student loan interest deduction.

Educator Expenses

An eligible educator may deduct up to $300 of qualified expenses in 2025. If filing jointly and both spouses are eligible educators, each may deduct up to $300, but neither may deduct more than $300 individually.

Eligible Educator

A taxpayer qualifies if they:

• Work as a teacher, instructor, counselor, principal, or aide

• Teach kindergarten through grade 12

• Work at least 900 hours in a school during the year

Qualified Expenses

Unreimbursed expenses for:

• Books, supplies, and supplementary materials

• Computer equipment, software, and related services

• Classroom equipment

• PPE, disinfectants, and supplies used to prevent the spread of COVID‑19

Not Qualified

• Homeschooling expenses

• Nonathletic supplies for health or PE courses

Student Loan Interest Deduction

Taxpayers may deduct up to $2,500 of interest paid on a qualified student loan.

Requirements

The deduction is allowed when:

• The taxpayer paid interest on a qualified student loan

• Filing status is not MFS

• MAGI is below the phase‑out range

• The taxpayer (and spouse, if MFJ) cannot be claimed as a dependent

Qualified Student Loan

The loan must be:

• For the taxpayer, spouse, or dependent

• For a student enrolled at least half‑time in a degree or credential program

• Used for qualified education expenses

• Paid or incurred within a reasonable period before or after the loan was taken

• Not from a related person or qualified employer plan

Phase‑Out Rules (2025)

The $2,500 maximum deduction begins to phase out at:

• $85,000 MAGI (Single, HOH)

• $170,000 MAGI (MFJ)

Fully phased out at:

• $100,000 MAGI (Single, HOH)

• $200,000 MAGI (MFJ)

Student Loan Interest Phase‑Out Formula

Where:

If MAGI ≤ S → full deduction If MAGI ≥ S + R → deduction = 0