How much tax write off can you get from paying off loans?

[shahseh22]

Hi,
I'm thinking not to do PSLF and I have about $300k salary right now as an attending starting out from training. I have about $240k in federal student loans. I want to see how much I can write off in taxes for next year if I pay the principal out. My W2 position with my non profit organization is not giving me a retirement option for the first year of employment so I don't have anything I can really contribute to. I don't want to buy a home in this market either. Any advice appreciated. thanks

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[SigmaFS]

Given your circumstances, student loan interest deduction = $0. The income phase out is $85k for single and $170k for married. Retirement contribution in 1st year of employment, consider a traditional IRA ($6K limit) or a backdoor Roth IRA ($6k limit). An HSA if you have a qualifying high deductible health plan.

 

[RangerBob]

As Sigma says, it’s unfortunately likely to be $0 because you make too much. The deduction is quite small even when you do qualify—you can deduct up to $2500 in interest if I recall, so at best you save perhaps 1k if you’re in a high tax bracket (which means you likely make too much to qualify, as stated).

 

[mvenus929]

And to clarify, you don't get any sort of tax break for paying off the principal. If you don't make a lot, you can deduct a small amount of interest ($2500 per year). You won't qualify on an attending salary.

It would be nice to be able to pay student loans with pre-tax money, but we're not there yet.

 

[shahseh22]

Given your circumstances, student loan interest deduction = $0. The income phase out is $85k for single and $170k for married. Retirement contribution in 1st year of employment, consider a traditional IRA ($6K limit) or a backdoor Roth IRA ($6k limit). An HSA if you have a qualifying high deductible health plan.

Thanks, I'm single so it makes it even harder. My employer says they don't have retirement option for me. Do you think I should look into real estate syndication or something where I can write off interest from taxes? I was silly and chose the best Health plan which actually has a low deductible (if any) so I don't think HSA can work for me. Thanks for any input.