Final answer:
Generally, it is true that if you are married and file separately, you cannot deduct student loan interest according to IRS rules. To claim the deduction, specific conditions, including filing status, must be met, and Married Filing Separately typically disqualifies you.
Step-by-step explanation:
The statement "If your filing status is Married Filing Separately, you are not allowed to deduct student loan interest" is generally True. The IRS specifies that if you are married and file separately, you are ineligible for the student loan interest deduction. This deduction can reduce your taxable income by up to $2,500, but to qualify, you must meet certain conditions, which include filing status.
It is important to note that tax laws can be complex and can change, so it is always a good idea to consult with a tax professional or refer to the latest IRS guidelines for the most accurate information.