Sandy has a student loan of $29,000 and pays $308 each month with $121 going to interest. What is her deductible student loan interest for the year?

To determine Sandy's deductible student loan interest for the year, we need to look at the total interest paid over the course of the year. Sandy pays $308 each month, with $121 of that amount being allocated to interest.

To find the annual interest amount, we can multiply the monthly interest by the number of months in a year. Since there are 12 months in a year, we use the following calculation:

Monthly interest paid: $121

Total annual interest paid: $121 x 12 = $1,452

According to IRS guidelines, individual taxpayers can deduct student loan interest up to a certain limit, which is subject to phase-out based on income levels. As long as Sandy's income falls within the acceptable range, the entire amount of $1,452 can be deducted.

This calculation aligns with the provision allowing borrowers to claim interest paid on qualified student loans, making the deductible interest for Sandy $1,452. Understanding how to calculate the annual interest from monthly payments is crucial for accurately determining the tax benefit associated with student loans.