Tax Tip: Getting a Deduction for Your Student Debt

— -- When it comes to filing your taxes, it pays to have too much student debt.

"Student loan interest is a deduction that people qualify for," Internal Revenue Service spokesman Eric Smith says.

The American Opportunity Credit allows anyone paying off their college debt to deduct up to $2,500, he says. To qualify, taxpayers also need to meet an adjusted gross income requirement of $80,000 or less per individual, or $160,000 or less for married couples filing jointly.

"One thing about the student loan interest deduction that is different from some other deductions is you can get it even if you don't itemize deductions," Smith explains.

The American Opportunity Credit also isn't limited to students. As TurboTax vice president Bob Meighan explains, parents can get in on the action, too.

"Your child may be on their own right now,” Meighan says, “but the parents may be stuck with the student loan bill.”