Perry Mayson, a single taxpayer, graduated law school last year with quite a bit of qualified student loan debt and ends up paying $4,300 in interest on the loan in the current tax year. Fortunately, Perry is well compensated and earns adjusted gross income of $90,000 during the current year. Perry may deduct his student loan interest in the current year. A. True
B. False

False

Explanation:

Adjusted gross income (AGI) refers to the measure of income calculated from gross income. It is used to determine how much of an individual's income is taxable. It affects a taxpayer's eligibility to claim many of the deductions and credits available on the tax return.

Gross income is the total money earned by an individual in a year, which includes wages, dividends, alimony, capital gains, interest income, royalties, rental income, and retirement distributions.

Modified Adjusted Gross Income (MAGI) is the adding back of certain items such as foreign earned income and tax-exempt student loan interest.

The amount for MAGI where student loan can be deducted is is $80,000.

Perry may not deduct his student loan interest in the current year because his AGI has exceeded the $80,000 threshold.

B. False

Explanation:

Since Perry Mayson is well compensated and earns adjusted gross income of $90,000 during the current year. Perry cannot deduct his student loan interest in the current year because his gross income of $90,000 has exceeded the maximum benchmark or threshold (MAGI) appropriate for the deduction of student loan interest.

For single taxpayers in the United States of America, the maximum benchmark or threshold appropriate for the deduction of student loan interest is $80,000.

Hence, if a student's Modified Adjusted Gross Income (MAGI) is below $80,000; then student loan interest can be deducted.

a

explanation:

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