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$2,500) by a fraction. The numerator (top part) is your MAGI minus $70,000 ($140,000 in the case of a joint re- turn). The denominator (bottom part) is $15,000 ($30,000 in the case of a joint return). Subtract the result from your deduction (before the phaseout) to give you the amount you can deduct. Example 1. During 2021, you paid $800 interest on a qualified student loan. Your 2021 MAGI is $155,000 and you are filing a joint return. You must reduce your deduc- tion by $400, figured as follows. $800 × $155,000 − $140,000 $30,000 = $400 Your reduced student loan interest deduction is $400 ($800 − $400). Example 2. The facts are the same as in Example 1, except that you paid $2,750 interest. Your maximum de- duction for 2021 is $2,500. You must reduce your maxi- mum deduction by $1,250, figured as follows. $2,500 × $155,000 − $140,000 $30,000 = $1,250 In this example, your reduced student loan interest deduc- tion is $1,250 ($2,500 − $1,250). Which Worksheet To Use Generally, you figure the deduction using the Student Loan Interest Deduction Worksheet in the Schedule 1 (Form 1040) instructions included in the Instructions for Form 1040 (and 1040-SR). However, if you are filing Form 2555, Foreign Earned Income; Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa; or you are excluding income from sources within Puerto Rico, you must complete Worksheet 4-1. Claiming the Deduction The student loan interest deduction is an adjustment to in- come. To claim the deduction, enter the allowable amount on Schedule 1 (Form 1040), line 21. Page 36 Chapter 4 Student Loan Interest Deduction