What is the amount Joanne can take as a student loan interest deduction on her Form 1040, Schedule 1?

The student loan interest deduction allows eligible taxpayers to deduct interest paid on qualified student loans, up to a maximum of $2,500 per year. This deduction is available to individuals who meet certain income limitations and have paid interest on a qualified student loan for a qualified higher education expense.

In this case, since the question specifically asks about the amount Joanne can claim, the correct answer aligns with the maximum allowable deduction of $2,500. To qualify for this deduction, it is essential that the loans were taken out solely to pay for qualified education expenses for Joanne, and not for any other purposes. Full eligibility criteria include being legally obligated to pay the interest and having a modified adjusted gross income below certain thresholds.

Understanding these guidelines helps in accurately determining the allowable deduction amount, which in this instance is capped at $2,500, thus affirming that Joanne can indeed take this amount as her student loan interest deduction on her Form 1040, Schedule 1.