Interest Paid on student loans- tax deduction?
I paid off my entire Canada/Ontario student loan in 2008 (approx 35k), and I was wondering what that would translate in terms of tax credits. Previously, I was able to claim 500 for interest paid while I was paying month to month. I there a maximum claim? Is the interest paid a lump sum if I pay my entire loan off in one year?
thanks
The Student Loan corporation should send you a statement, just like any other year, showing the amount paid for the principal and interest. The interest is the amount that is deductible at line 319.
Whether the amount is going to be higher this year, I would think not. Loan payments are normally structured so that you are paying all of the interest accrued in a year, and part of the principal. I would suspect that the tax deductible amount would be lower this year than last year.
