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2007 Income Tax Online

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2007 Income Tax Online

2007 income tax online 4. 2007 income tax online   Other Section 501(c) Organizations Table of Contents Introduction 501(c)(4) - Civic Leagues and Social Welfare OrganizationsSpecific Organizations 501(c)(5) - Labor, Agricultural and Horticultural OrganizationsLabor Organizations Agricultural and Horticultural Organizations 501(c)(6) - Business Leagues, etc. 2007 income tax online Line of business. 2007 income tax online Examples. 2007 income tax online Improvement of business conditions. 2007 income tax online Exception for local legislation. 2007 income tax online De minimis exception. 2007 income tax online Grass roots lobbying. 2007 income tax online 501(c)(7) - Social and Recreation ClubsLimited membership. 2007 income tax online Support. 2007 income tax online Facilities open to public. 2007 income tax online Gross receipts from nonmembership sources. 2007 income tax online Gross receipts. 2007 income tax online Nontraditional activities. 2007 income tax online 501(c)(8) and 501(c)(10) - Fraternal Beneficiary Societies and Domestic Fraternal SocietiesFraternal Beneficiary Societies (501(c)(8)) Domestic Fraternal Societies (501(c)(10)) 501(c)(4), 501(c)(9), and 501(c)(17) - Employees' AssociationsLocal Employees' Associations (501(c)(4)) Voluntary Employees' Beneficiary Associations (501(c)(9)) Supplemental Unemployment Benefit Trusts (501(c)(17)) 501(c)(12) - Local Benevolent Life Insurance Associations, Mutual Irrigation and Telephone Companies, and Like OrganizationsMembership. 2007 income tax online Losses and expenses. 2007 income tax online Distributions of proceeds. 2007 income tax online The 85% Requirement Local Life Insurance Associations Mutual or Cooperative Associations 501(c)(13) - Cemetery CompaniesBuying cemetery property. 2007 income tax online Perpetual care organization. 2007 income tax online Care of individual plots. 2007 income tax online 501(c)(14) - Credit Unions and Other Mutual Financial OrganizationsState-Chartered Credit Unions Other Mutual Financial Organizations 501(c)(19) - Veterans' Organizations 501(c)(20) - Group Legal Services Plan Organizations 501(c)(21) - Black Lung Benefit TrustsExcise taxes. 2007 income tax online 501(c)(2) - Title-Holding Corporations for Single Parent CorporationsExpenses. 2007 income tax online Waiver of payment of income. 2007 income tax online 501(c)(25) - Title-Holding Corporations or Trusts for Multiple Parent CorporationsUnrelated Business Income 501(c)(26) - State-Sponsored High-Risk Health Coverage Organizations 501(c)(27) - Qualified State-Sponsored Workers' Compensation Organizations 501(c)(29) - CO-OP Health Insurance Issuers New Guidance for IRC 501(c)(29) Qualified Nonprofit Health Insurance Issuers General Requirements for Exemption under 501(c)(29) and Annual Filing Requirement Additional Guidance for Prospective 501(c)(29) Organizations Introduction This chapter contains specific information for certain organizations described in section 501(c), other than those organizations that are described in section 501(c)(3). 2007 income tax online Section 501(c)(3) organizations are covered in chapter 3 of this publication. 2007 income tax online The Table of Contents at the beginning of this publication, as well as the Organization Reference Chart, may help you locate at a glance the type of organization discussed in this chapter. 2007 income tax online 501(c)(4) - Civic Leagues and Social Welfare Organizations If your organization is not organized for profit and will be operated primarily to promote social welfare to benefit the community, you should file Form 1024 to apply for recognition of exemption from federal income tax under section 501(c)(4). 2007 income tax online The discussion that follows describes the information you must provide when applying. 2007 income tax online For application procedures, see chapter 1. 2007 income tax online To qualify for exemption under section 501(c)(4), the organization's net earnings must be devoted primarily to charitable, educational, or recreational purposes. 2007 income tax online In addition, no part of the organization's net earnings can inure to the benefit of any private shareholder or individual. 2007 income tax online If the organization provides an excess benefit to certain persons, an excise tax may be imposed. 2007 income tax online See Excise tax on excess benefit transactions , under Excess Benefit Transactions in chapter 5 for more information about this tax. 2007 income tax online Examples. 2007 income tax online   Types of organizations that are considered to be social welfare organizations are civic associations and volunteer fire companies. 2007 income tax online Nonprofit operation. 2007 income tax online   You must submit evidence that your organization is organized and will be operated on a nonprofit basis. 2007 income tax online However, such evidence, including the fact that your organization is organized under a state law relating to nonprofit corporations, will not in itself establish a social welfare purpose. 2007 income tax online Social welfare. 2007 income tax online   To establish that your organization is organized primarily to promote social welfare, you should submit evidence with your application showing that your organization will operate primarily to further (in some way) the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements). 2007 income tax online   An organization that restricts the use of its facilities to employees of selected corporations and their guests is primarily benefiting a private group rather than the community. 2007 income tax online It therefore does not qualify as a section 501(c)(4) organization. 2007 income tax online Similarly, an organization formed to represent member-tenants of an apartment complex does not qualify, since its activities benefit the member-tenants and not all tenants in the community. 2007 income tax online However, an organization formed to promote the legal rights of all tenants in a particular community may qualify under section 501(c)(4) as a social welfare organization. 2007 income tax online Political activity. 2007 income tax online   Promoting social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office. 2007 income tax online However, if you submit proof that your organization is organized primarily to promote social welfare, it can obtain exemption even if it participates legally in some political activity on behalf of or in opposition to candidates for public office. 2007 income tax online See the discussion in chapter 2 under Political Organization Income Tax Return . 2007 income tax online Social or recreational activity. 2007 income tax online   If social activities will be the primary purpose of your organization, you should not file an application for exemption as a social welfare organization but should file for exemption as a social club described in section 501(c)(7). 2007 income tax online Retirement benefit program. 2007 income tax online   An organization established by its members that has as its primary activity providing supplemental retirement benefits to its members or death benefits to their beneficiaries does not qualify as an exempt social welfare organization. 2007 income tax online It may qualify under another paragraph of section 501(c) depending on all the facts. 2007 income tax online   However, a nonprofit association that is established, maintained, and funded by a local government to provide the only retirement benefits to a class of employees may qualify as a social welfare organization under section 501(c)(4). 2007 income tax online Tax treatment of donations. 2007 income tax online   Donations to volunteer fire companies are deductible on the donor's federal income tax return, but only if made for exclusively public purposes. 2007 income tax online Contributions to civic leagues or other section 501(c)(4) organizations generally are not deductible as charitable contributions for federal income tax purposes. 2007 income tax online They may be deductible as trade or business expenses, if ordinary and necessary in the conduct of the taxpayer's business. 2007 income tax online However, see Deduction not allowed for dues used for political or legislative activities , under 501(c)(6) - Business Leagues, etc. 2007 income tax online for more information. 2007 income tax online For more information on social welfare organizations, see Life Cycle of a Social Welfare Organization at IRS. 2007 income tax online gov. 2007 income tax online Specific Organizations The following information should be contained in the application form and accompanying statements of certain types of civic leagues or social welfare organizations. 2007 income tax online Volunteer fire companies. 2007 income tax online   If your organization wishes to obtain exemption as a volunteer fire company or similar organization, you should submit evidence that its members are actively engaged in fire fighting and similar disaster assistance, whether it actually owns the fire fighting equipment, and whether it provides any assistance for its members, such as death and medical benefits in case of injury to them. 2007 income tax online   If your organization does not have an independent social purpose, such as providing recreational facilities for members, it may be exempt under section 501(c)(3). 2007 income tax online In this event, your organization should file Form 1023. 2007 income tax online Homeowners' associations. 2007 income tax online   A membership organization formed by a real estate developer to own and maintain common green areas, streets, and sidewalks and to enforce covenants to preserve the appearance of the development should show that it is operated for the benefit of all the residents of the community. 2007 income tax online The term community generally refers to a geographical unit recognizable as a governmental subdivision, unit, or district thereof. 2007 income tax online Whether a particular association meets the requirement of benefiting a community depends on the facts and circumstances of each case. 2007 income tax online Even if an area represented by an association is not a community, the association can still qualify for exemption if its activities benefit a community. 2007 income tax online   The association should submit evidence that areas such as roadways and park land that it owns and maintains are open to the general public and not just its own members. 2007 income tax online It also must show that it does not engage in exterior maintenance of private homes. 2007 income tax online   A homeowners' association that is not exempt under section 501(c)(4) and that is a condominium management association, a residential real estate management association, or a timeshare association generally can elect under the provisions of section 528 to receive certain tax benefits that, in effect, permit it to exclude its exempt function income from its gross income. 2007 income tax online Other organizations. 2007 income tax online   Other nonprofit organizations that qualify as social welfare organizations include: An organization operating an airport that is on land owned by a local government, which supervises the airport's operation, and that serves the general public in an area with no other airport, A community association that works to improve public services, housing, and residential parking; publishes a free community newspaper; sponsors a community sports league, holiday programs, and meetings; and contracts with a private security service to patrol the community, A community association devoted to preserving the community's traditions, architecture, and appearance by representing it before the local legislature and administrative agencies in zoning, traffic, and parking matters, An organization that tries to encourage industrial development and relieve unemployment in an area by making loans to businesses so they will relocate to the area, and An organization that holds an annual festival of regional customs and traditions. 2007 income tax online 501(c)(5) - Labor, Agricultural and Horticultural Organizations If you are a member of an organization that wants to obtain recognition of exemption from federal income tax as a labor, agricultural, or horticultural organization, you should submit an application on Form 1024. 2007 income tax online You must indicate in your application for exemption and accompanying statements that no part of the organization's net earnings will inure to the benefit of any member. 2007 income tax online In addition, you should follow the procedure for obtaining recognition of exempt status described in chapter 1. 2007 income tax online Submit any additional information that may be required, as described in this section. 2007 income tax online Tax treatment of donations. 2007 income tax online   Contributions to labor, agricultural, and horticultural organizations are not deductible as charitable contributions on the donor's federal income tax return. 2007 income tax online However, such payments may be deductible as business expenses if they are ordinary and necessary in the conduct of the taxpayer's trade or business. 2007 income tax online For more information about certain limits affecting the deductibility of these business expenses, see Deduction not allowed for dues used for political or legislative activities , under 501(c)(6) - Business Leagues, etc. 2007 income tax online Labor Organizations A labor organization is an association of workers who have combined to protect and promote the interests of the members by bargaining collectively with their employers to secure better working conditions. 2007 income tax online To show that your organization has the purpose of a labor organization, you should include in the articles of organization or accompanying statements (submitted with your exemption application) information establishing that the organization is organized to better the conditions of workers, improve the grade of their products, and develop a higher degree of efficiency in their respective occupations. 2007 income tax online In addition, no net earnings of the organization can inure to the benefit of any member. 2007 income tax online Composition of membership. 2007 income tax online   While a labor organization generally is composed of employees or representatives of the employees (in the form of collective bargaining agents) and similar employee groups, evidence that an organization's membership consists mainly of workers does not in itself indicate an exempt purpose. 2007 income tax online You must show in your application that your organization has the purposes described in the preceding paragraph. 2007 income tax online These purposes can be accomplished by a single labor organization acting alone or by several organizations acting together through a separate organization. 2007 income tax online Benefits to members. 2007 income tax online   The payment by a labor organization of death, sick, accident, and similar benefits to its individual members with funds contributed by its members, if made under a plan to better the conditions of the members, does not preclude exemption as a labor organization. 2007 income tax online However, an organization does not qualify for exemption as a labor organization if it has no authority to represent members in job-related matters, even if it provides weekly income to its members in the event of a lawful strike by the members' union, in return for an annual payment by the member. 2007 income tax online   For more information on labor organizations, see Life Cycle of a Labor Organization at IRS. 2007 income tax online gov. 2007 income tax online Agricultural and Horticultural Organizations Agricultural and horticultural organizations are connected with raising livestock, forestry, cultivating land, raising and harvesting crops or aquatic resources, cultivating useful or ornamental plants, and similar pursuits. 2007 income tax online For the purpose of these provisions, aquatic resources include only animal or vegetable life, but not mineral resources. 2007 income tax online The term harvesting, in this case, includes fishing and related pursuits. 2007 income tax online Agricultural organizations can be quasi-public in character and are often designed to encourage the development of better agricultural and horticultural products through a system of awards, using income from entry fees, gate receipts, and donations to meet the necessary expenses of upkeep and operation. 2007 income tax online When the activities are directed toward the improvement of marketing or other business conditions in one or more lines of business, rather than the improvement of production techniques or the betterment of the conditions of persons engaged in agriculture, the organization must qualify for exemption as a business league, board of trade, or other organization, as discussed next in the section on 501(c)(6) organizations. 2007 income tax online The primary purpose of exempt agricultural and horticultural organizations must be to better the conditions of those engaged in agriculture or horticulture, develop more efficiency in agriculture or horticulture, or improve the products. 2007 income tax online The following list contains some examples of activities that show an agricultural or horticultural purpose. 2007 income tax online Promoting various cooperative agricultural, horticultural, and civic activities among rural residents by a state, farm, or home bureau. 2007 income tax online Exhibiting livestock, farm products, and other characteristic features of agriculture and horticulture. 2007 income tax online Testing soil for members and nonmembers of the farm bureau on a cost basis, the results of the tests and other recommendations being furnished to the community members to educate them in soil treatment. 2007 income tax online Guarding the purity of a specific breed of livestock. 2007 income tax online Encouraging improvements in the production of fish on privately owned fish farms. 2007 income tax online Negotiating with processors for the price to be paid to members for their crops. 2007 income tax online For more information on agricultural or horticultural organizations, see Life Cycle of an Agricultural or Horticultural Organization at IRS. 2007 income tax online gov. 2007 income tax online 501(c)(6) - Business Leagues, etc. 2007 income tax online If your association wants to apply for recognition of exemption from federal income tax as a nonprofit business league, chamber of commerce, real estate board, or board of trade, it should file Form 1024. 2007 income tax online For a discussion of the procedure to follow, see chapter 1. 2007 income tax online Your organization must indicate in its application form and attached statements that no part of its net earnings will inure to the benefit of any private shareholder or individual and that it is not organized for profit or organized to engage in an activity ordinarily carried on for profit (even if the business is operated on a cooperative basis or produces only sufficient income to be self-sustaining). 2007 income tax online In addition, your organization must be primarily engaged in activities or functions that are the basis for its exemption. 2007 income tax online It must be primarily supported by membership dues and other income from activities substantially related to its exempt purpose. 2007 income tax online A business league, in general, is an association of persons having some common business interest, the purpose of which is to promote that common interest and not to engage in a regular business of a kind ordinarily carried on for profit. 2007 income tax online Trade associations and professional associations are considered business leagues. 2007 income tax online Chamber of commerce. 2007 income tax online   A chamber of commerce usually is composed of the merchants and traders of a city. 2007 income tax online Board of trade. 2007 income tax online   A board of trade often consists of persons engaged in similar lines of business. 2007 income tax online For example, a nonprofit organization formed to regulate the sale of a specified agricultural commodity to assure equal treatment of producers, warehouse workers, and buyers is a board of trade. 2007 income tax online   Chambers of commerce and boards of trade usually promote the common economic interests of all the commercial enterprises in a given trade community. 2007 income tax online Real estate board. 2007 income tax online   A real estate board consists of members interested in improving the business conditions in the real estate field. 2007 income tax online It is not organized for profit and no part of the net earnings inures to the benefit of any private shareholder or individual. 2007 income tax online Professional football leagues. 2007 income tax online   The Internal Revenue Code specifically defines professional football leagues as exempt organizations under section 501(c)(6). 2007 income tax online They are exempt whether or not they administer a pension fund for football players. 2007 income tax online General purpose. 2007 income tax online   You must indicate in the material submitted with your application that your organization will be devoted to the improvement of business conditions of one or more lines of business as distinguished from the performance of particular services for individual persons. 2007 income tax online It must be shown that the conditions of a particular trade or the interests of the community will be advanced. 2007 income tax online Merely indicating the name of the organization or the object of the local statute under which it is created is not enough to demonstrate the required general purpose. 2007 income tax online Line of business. 2007 income tax online   This term generally refers either to an entire industry or to all components of an industry within a geographic area. 2007 income tax online It does not include a group composed of businesses that market a particular brand within an industry. 2007 income tax online Common business interest. 2007 income tax online   A common business interest of all members of the organization must be established by the application documents. 2007 income tax online Examples. 2007 income tax online   Activities that would tend to illustrate a common business interest are: Promotion of higher business standards and better business methods and encouragement of uniformity and cooperation by a retail merchants association, Education of the public in the use of credit, Establishment of uniform casualty rates and compilation of statistical information by an insurance rating bureau operated by casualty insurance companies, Establishment and maintenance of the integrity of a local commercial market, Operation of a trade publication primarily intended to benefit an entire industry, and Encouragement of the use of goods and services of an entire industry (such as a lawyer referral service whose main purpose is to introduce individuals to the use of the legal profession in the hope that they will enter into lawyer-client relationships on a paying basis as a result). 2007 income tax online Improvement of business conditions. 2007 income tax online   Generally, this must be shown to be the purpose of the organization. 2007 income tax online This is not established by evidence of particular services that provide a convenience or economy to individual members in their businesses, such as advertising that carries the name of members, interest-free loans, assigning exclusive franchise areas, operation of a real estate multiple listing system, or operation of a credit reporting agency. 2007 income tax online Stock or commodity exchange. 2007 income tax online   A stock or commodity exchange is not a business league, chamber of commerce, real estate board, or board of trade and is not exempt under section 501(c)(6). 2007 income tax online Legislative activity. 2007 income tax online   An organization that is exempt under section 501(c)(6) can work for the enactment of laws to advance the common business interests of the organization's members. 2007 income tax online Deduction not allowed for dues used for political or legislative activities. 2007 income tax online   A taxpayer cannot deduct the part of dues or other payments to a business league, trade association, labor union, or similar organization that is reported to the taxpayer by the organization as having been used for any of the following activities. 2007 income tax online Influencing legislation. 2007 income tax online Participating or intervening in a political campaign for, or against, any candidate for public office. 2007 income tax online Trying to influence the general public, or part of the general public, with respect to elections, legislative matters, or referendums (also known as grass roots lobbying). 2007 income tax online Communicating directly with certain executive branch officials to try to influence their official actions or positions. 2007 income tax online See Dues Used for Lobbying or Political Activities under Required Disclosures in chapter 2 for more information. 2007 income tax online Exception for local legislation. 2007 income tax online   Members can deduct dues (or assessments) to an organization that are for expenses of: Appearing before, submitting statements to, or sending communications to members of a local council or similar governing body with respect to legislation or proposed legislation of direct interest to the member, or Communicating information between the member and the organization with respect to local legislation or proposed legislation of direct interest to the organization or the member. 2007 income tax online Legislation or proposed legislation is of direct interest to a taxpayer if it will, or can reasonably be expected to, affect the taxpayer's trade or business. 2007 income tax online De minimis exception. 2007 income tax online   In-house expenditures of $2,000 or less for the year for activities (1) – (4) listed earlier will not prevent a deduction for dues if the dues meet all other tests to be deductible as a business expense. 2007 income tax online Grass roots lobbying. 2007 income tax online   A tax-exempt trade association, labor union, or similar organization is considered to be engaging in grass roots lobbying if it contacts prospective members or calls upon its own members to contact their employees and customers for the purpose of urging such persons to communicate with their elected state or Congressional representatives to support the promotion, defeat, or repeal of legislation that is of direct interest to the organization. 2007 income tax online Any dues or assessments directly related to such activities are not deductible by the taxpayer, since the individuals being contacted, who are not members of the organization, are a segment of the general public. 2007 income tax online Tax treatment of donations. 2007 income tax online   Contributions to organizations described in this section are not deductible as charitable contributions on the donor's federal income tax return. 2007 income tax online They may be deductible as trade or business expenses if ordinary and necessary in the conduct of the taxpayer's business. 2007 income tax online   For more information on business leagues, see Life Cycle of a Business League (Trade Association) on IRS. 2007 income tax online gov. 2007 income tax online 501(c)(7) - Social and Recreation Clubs If your club is organized for pleasure, recreation, and other similar nonprofitable purposes and substantially all of its activities are for these purposes, it should file Form 1024 to apply for recognition of exemption from federal income tax. 2007 income tax online In applying for recognition of exemption, you should submit the information described in this section. 2007 income tax online Also see chapter 1 for the procedures to follow. 2007 income tax online Typical organizations that should file for recognition of exemption as social clubs include: College alumni associations that are not described in chapter 3 under Alumni association , College fraternities or sororities operating chapter houses for students, Country clubs, Amateur hunting, fishing, tennis, swimming, and other sport clubs, Dinner clubs that provide a meeting place, library, and dining room for members, Hobby clubs, Garden clubs, and Variety clubs. 2007 income tax online Discrimination prohibited. 2007 income tax online   Your organization will not be recognized as tax exempt if its charter, bylaws, or other governing instrument, or any written policy statement provides for discrimination against any person on the basis of race, color, or religion. 2007 income tax online   However, a club that in good faith limits its membership to the members of a particular religion to further the teachings or principles of that religion and not to exclude individuals of a particular race or color will not be considered as discriminating on the basis of religion. 2007 income tax online Also, the restriction on religious discrimination does not apply to a club that is an auxiliary of a fraternal beneficiary society (discussed later) if that society is described in section 501(c)(8) and exempt from tax under section 501(a) and limits its membership to the members of a particular religion. 2007 income tax online Private benefit prohibited. 2007 income tax online   No part of the organization's net earnings can inure to the benefit of any person having a personal and private interest in the activities of the organization. 2007 income tax online For purposes of this requirement, it is not necessary that net earnings be actually distributed. 2007 income tax online Even undistributed earnings can benefit members. 2007 income tax online Examples of this include a decrease in membership dues or an increase in the services the club provides to its members without a corresponding increase in dues or other fees paid for club support. 2007 income tax online However, fixed-fee payments to members who bring new members into the club are not an inurement of the club's net earnings, if the payments are reasonable compensation for performance of a necessary administrative service. 2007 income tax online Purposes. 2007 income tax online   To show that your organization possesses the characteristics of a club within the meaning of the exemption law, you should submit evidence with your application that personal contact, commingling, and fellowship exist among members. 2007 income tax online You must show that members are bound together by a common objective of pleasure, recreation, and other nonprofitable purposes. 2007 income tax online   Fellowship need not be present between each member and every other member of a club if it is a material part in the life of the organization. 2007 income tax online A statewide or nationwide organization that is made up of individual members, but is divided into local groups, satisfies this requirement if fellowship is a material part of the life of each local group. 2007 income tax online   The term other nonprofitable purposes means other purposes similar to pleasure and recreation. 2007 income tax online For example, a club that, in addition to its social activities, has a plan for the payment of sick and death benefits is not operating exclusively for pleasure, recreation, and other nonprofitable purposes. 2007 income tax online Limited membership. 2007 income tax online   The membership in a social club must be limited. 2007 income tax online To show that your organization has a purpose that would characterize it as a club, you should submit evidence with your application that there are limits on admission to membership consistent with the character of the club. 2007 income tax online   A social club that issues corporate membership is dealing with the general public in the form of the corporation's employees. 2007 income tax online Corporate members of a club are not the kind of members contemplated by the law. 2007 income tax online Gross receipts from these members would be a factor in determining whether the club qualifies as a social club. 2007 income tax online See Gross receipts from nonmembership sources , later. 2007 income tax online Bona fide individual memberships paid for by a corporation would not have an effect on the gross receipts source. 2007 income tax online   The fact that a social club may have an associate (nonvoting) class of membership will not be, in and of itself, a cause for nonrecognition of exemption. 2007 income tax online However, if one membership class pays substantially lower dues and fees than another membership class, although both classes enjoy the same rights and privileges in using the club facilities, there may be an inurement of income to the benefited class, resulting in a denial of the club's exemption. 2007 income tax online Support. 2007 income tax online   In general, your club should be supported solely by membership fees, dues, and assessments. 2007 income tax online However, if otherwise entitled to exemption, your club will not be disqualified because it raises revenue from members through the use of club facilities or in connection with club activities. 2007 income tax online Business activities. 2007 income tax online   If your club will engage in business, such as selling real estate, timber, or other products or services, it generally will be denied exemption. 2007 income tax online However, evidence submitted with your application form that your organization will provide meals, refreshments, or services related to its exempt purposes only to its own members or their dependents or guests will not cause denial of exemption. 2007 income tax online Facilities open to public. 2007 income tax online   Evidence that your club's facilities will be open to the general public (persons other than members or their dependents or guests) may cause denial of exemption. 2007 income tax online This does not mean, however, that any dealing with outsiders will automatically deprive a club of exemption. 2007 income tax online Gross receipts from nonmembership sources. 2007 income tax online   A section 501(c)(7) organization can receive up to 35% of its gross receipts, including investment income, from sources outside of its membership without losing its tax-exempt status. 2007 income tax online Income from nontraditional business activity with members is not exempt function income, and thus is included as income from sources outside of the membership. 2007 income tax online Of the 35% gross receipts listed above, up to 15% of the gross receipts can be derived from the use of the club's facilities or services by the general public. 2007 income tax online If an organization has outside income that is more than these limits, all the facts and circumstances will be taken into account in determining whether the organization qualifies for exempt status. 2007 income tax online Gross receipts. 2007 income tax online   Gross receipts, for this purpose, are receipts from the normal and usual (traditionally conducted) activities of the club. 2007 income tax online These receipts include charges, admissions, membership fees, dues, assessments, investment income, and normal recurring capital gains on investments. 2007 income tax online Receipts do not include initiation fees and capital contributions. 2007 income tax online Unusual amounts of income, such as from the sale of a clubhouse or similar facility, are not included in gross receipts or in figuring the percentage limits. 2007 income tax online Nontraditional activities. 2007 income tax online   Activities conducted by a social club need to further its exempt purposes. 2007 income tax online Traditional business activities are those that further a social club's exempt purposes. 2007 income tax online Nontraditional business activities do not further the exempt purposes of a social club even if conducted solely on a membership basis. 2007 income tax online Nontraditional business activities are prohibited (subject to an insubstantial, trivial, and nonrecurrent test) for businesses conducted with both members and nonmembers. 2007 income tax online Examples of nontraditional business activities include sale of package liquor, take-out food, and long-term room rental. 2007 income tax online Fraternity foundations. 2007 income tax online   If your organization is a foundation formed for the exclusive purpose of acquiring and leasing a chapter house to a local fraternity chapter or sorority chapter maintained at an educational institution and does not engage in any social or recreational activities, it may be a title holding corporation (discussed later under section 501(c)(2) organizations and under section 501(c)(25) organizations) rather than a social club. 2007 income tax online Tax treatment of donations. 2007 income tax online   Donations to exempt social and recreation clubs are not deductible as charitable contributions on the donor's federal income tax return. 2007 income tax online 501(c)(8) and 501(c)(10) - Fraternal Beneficiary Societies and Domestic Fraternal Societies This section describes the information to be provided upon application for recognition of exemption by two types of fraternal societies: beneficiary and domestic. 2007 income tax online The major distinction is that fraternal beneficiary societies provide for the payment of life, sick, accident, or other benefits to their members or their dependents, while domestic fraternal societies do not provide these benefits but rather devote their earnings to fraternal, religious, charitable, etc. 2007 income tax online , purposes. 2007 income tax online The procedures to follow in applying for recognition of exemption are described in chapter 1. 2007 income tax online If your organization is controlled by a central organization, you should check with your controlling organization to determine whether your unit has been included in a group exemption letter or can be added. 2007 income tax online If so, your organization need not apply for individual recognition of exemption. 2007 income tax online For more information, see Group Exemption Letter in chapter 1 of this publication. 2007 income tax online Tax treatment of donations. 2007 income tax online   Donations by an individual to a domestic fraternal beneficiary society or a domestic fraternal society operating under the lodge system are deductible as charitable contributions only if used exclusively for religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children or animals. 2007 income tax online Fraternal Beneficiary Societies (501(c)(8)) A fraternal beneficiary society, order, or association must file an application for recognition of exemption from federal income tax on Form 1024. 2007 income tax online The application and accompanying statements should establish that the organization: Is a fraternal organization, Operates under the lodge system or for the exclusive benefit of the members of a fraternal organization itself operating under the lodge system, and Provides for the payment of life, sick, accident, or other benefits to the members of the society, order, or association or their dependents. 2007 income tax online Lodge system. 2007 income tax online   Operating under the lodge system means carrying on activities under a form of organization that comprises local branches, chartered by a parent organization and largely self-governing, called lodges, chapters, or the like. 2007 income tax online Payment of benefits. 2007 income tax online   It is not essential that every member be covered by the society's program of sick, accident, or death benefits. 2007 income tax online An organization can qualify for exemption if most of its members are eligible for benefits, and the benefits are paid from contributions or dues paid by those members. 2007 income tax online   The benefits must be limited to members and their dependents. 2007 income tax online If members will have the ability to confer benefits to other than themselves and their dependents, exemption will not be recognized. 2007 income tax online Whole-life insurance. 2007 income tax online   Whole-life insurance constitutes a life benefit under section 501(c)(8) even though the policy may contain investment features such as a cash surrender value or a policy loan. 2007 income tax online Reinsurance pool. 2007 income tax online   Payments by a fraternal beneficiary society into a state-sponsored reinsurance pool that protects participating insurers against excessive losses on major medical health and accident insurance will not preclude exemption as a fraternal beneficiary society. 2007 income tax online Domestic Fraternal Societies (501(c)(10)) A domestic fraternal society, order, or association must file an application for recognition of exemption from federal income tax on Form 1024. 2007 income tax online The application and accompanying statements should establish that the organization: Is a domestic fraternal organization organized in the U. 2007 income tax online S. 2007 income tax online , Operates under the lodge system, Devotes its net earnings exclusively to religious, charitable, scientific, literary, educational, and fraternal purposes, and Does not provide for the payment of life, sick, accident, or other benefits to its members. 2007 income tax online The organization can arrange with insurance companies to provide optional insurance to its members without jeopardizing its exempt status. 2007 income tax online 501(c)(4), 501(c)(9), and 501(c)(17) - Employees' Associations This section describes the information to be provided upon application for recognition of exemption by the following types of employees' associations: A voluntary employees' beneficiary association (including federal employees' associations) organized to pay life, sick, accident, and similar benefits to members or their dependents, or designated beneficiaries, if no part of the net earnings of the association inures to the benefit of any private shareholder or individual, and A supplemental unemployment benefit trust whose primary purpose is providing for payment of supplemental unemployment benefits. 2007 income tax online Both the application form to file and the information to provide are discussed later under the section that describes your employee association. 2007 income tax online Chapter 1 describes the procedures to follow in applying for exemption. 2007 income tax online Tax treatment of donations. 2007 income tax online   Donations to these organizations are not deductible as charitable contributions on the donor's federal income tax return. 2007 income tax online Local Employees' Associations (501(c)(4)) A local association of employees whose membership is limited to employees of a designated person or persons in a particular municipality, and whose income will be devoted exclusively to charitable, educational, or recreational purposes. 2007 income tax online A local employees' association must apply for recognition of exemption by filing Form 1024. 2007 income tax online The organization must submit evidence that: It is of a purely local character, Its membership is limited to employees of a designated person or persons in a particular locality, and Its net earnings will be devoted exclusively to charitable, educational, or recreational purposes. 2007 income tax online A local association of employees that has established a system of paying retirement or death benefits, or both, to its members will not qualify for exemption since the payment of these benefits is not considered as being for charitable, educational, or recreational purposes. 2007 income tax online Similarly, a local association of employees that is operated primarily as a cooperative buying service for its members in order to obtain discount prices on merchandise, services, and activities does not qualify for exemption. 2007 income tax online Voluntary Employees' Beneficiary Associations (501(c)(9)) An application for recognition of exemption as a voluntary employees' beneficiary association must be filed on Form 1024. 2007 income tax online The material submitted with the application must show that your organization: Is a voluntary association of employees, Will provide for payment of life, sick, accident, or other benefits to members or their dependents or designated beneficiaries and substantially all of its operations are for this purpose, and Will not allow any of its net earnings to inure to the benefit of any private individual or shareholder except in the form of scheduled benefit payments. 2007 income tax online To be complete, an application must include a copy of the document (such as the trust instrument) by which the organization was created; a full description of the benefits available to participants and the terms and conditions of eligibility for benefits (usually contained in a plan document); and, if providing benefits pursuant to a collective bargaining agreement, a copy of that agreement. 2007 income tax online Note. 2007 income tax online Under section 4976, the reversion of funds from a section 501(c)(9) organization to the employer who created the beneficiary association may subject the employer to a 100% penalty excise tax on the amount of the reversion. 2007 income tax online Notice requirement. 2007 income tax online   An organization will not be considered tax exempt under this section unless the organization gives notice to the IRS that it is applying for recognition of exempt status. 2007 income tax online The organization gives notice by filing Form 1024. 2007 income tax online If the notice is not given by 15 months after the end of the month in which the organization was created, the organization will not be exempt for any period before notice is given. 2007 income tax online An extension of time for filing the notice can be granted under the same procedures as those described for section 501(c)(3) organizations in chapter 3 under Application for Recognition of Exemption . 2007 income tax online Membership. 2007 income tax online   Membership of a section 501(c)(9) organization must consist of individuals who are employees and have an employment-related common bond. 2007 income tax online This common bond can be a common employer (or affiliated employers), coverage under one or more collective bargaining agreements, membership in a labor union, or membership in one or more locals of a national or international labor union. 2007 income tax online   The membership of an association can include some individuals who are not employees, provided they have an employment-related bond with the employee-members. 2007 income tax online For example, the owner of a business whose employees are members of the association can be a member. 2007 income tax online An association will be considered composed of employees if 90% of its total membership on one day of each quarter of its tax year consists of employees. 2007 income tax online Employees. 2007 income tax online   Employees include individuals who became entitled to membership because they are or were employees. 2007 income tax online For example, an individual will qualify as an employee even though the individual is on a leave of absence or has been terminated due to retirement, disability, or layoff. 2007 income tax online   Generally, membership is voluntary if an affirmative act is required on the part of an employee to become a member. 2007 income tax online Conversely, membership is involuntary if the designation as a member is due to employee status. 2007 income tax online However, an association will be considered voluntary if employees are required to be members of the organization as a condition of their employment and they do not incur a detriment (such as a payroll deduction) as a result of their membership. 2007 income tax online An employer has not imposed involuntary membership on the employee if membership is required as the result of a collective bargaining agreement or as an incident of membership in a labor organization. 2007 income tax online Payment of benefits. 2007 income tax online   The information submitted with your application must show that your organization will pay life, sick, accident, supplemental unemployment, or other similar benefits. 2007 income tax online The benefits can be provided directly by your association or indirectly by your association through the payments of premiums to an insurance company (or fees to a medical clinic). 2007 income tax online Benefits can be in the form of medical, clinical, or hospital services, transportation furnished for medical care, or money payments. 2007 income tax online Nondiscrimination requirements. 2007 income tax online   An organization that is part of a plan will not be exempt unless the plan meets certain nondiscrimination requirements. 2007 income tax online However, if the organization is part of a plan that is a collective bargaining agreement that was the subject of good faith bargaining between employee organizations and employers, the plan need not meet these requirements for the organization to qualify as tax exempt. 2007 income tax online   A plan meets the nondiscrimination requirements only if both of the following statements are true. 2007 income tax online Each class of benefits under the plan is provided under a classification of employees that is set forth in the plan and does not discriminate in favor of employees who are highly compensated individuals. 2007 income tax online The benefits provided under each class of benefits do not discriminate in favor of highly compensated individuals. 2007 income tax online A life insurance, disability, severance pay, or supplemental unemployment compensation benefit does not discriminate in favor of highly compensated individuals merely because the benefits available bear a uniform relationship to the total compensation, or the basic or regular rate of compensation, of employees covered by the plan. 2007 income tax online   For purposes of determining whether a plan meets the nondiscrimination requirements, the employer can elect to exclude all disability or severance payments payable to individuals who are in pay status as of January 1, 1985. 2007 income tax online This will not apply to any increase in such payment by any plan amendment adopted after June 22, 1984. 2007 income tax online   If a plan provides a benefit for which there is a nondiscrimination provision provided under Chapter 1 of the Internal Revenue Code as a condition of that benefit being excluded from gross income, these nondiscrimination requirements do not apply. 2007 income tax online The benefit will be considered nondiscriminatory only if it meets the nondiscrimination provision of the applicable Code section. 2007 income tax online For example, benefits provided under a medical reimbursement plan would meet the nondiscrimination requirements for an association, if the benefits meet the nondiscrimination requirements of section 105(h)(3) and 105(h)(4). 2007 income tax online Excluded employees. 2007 income tax online   Certain employees who are not covered by a plan can be excluded from consideration in applying these requirements. 2007 income tax online These include employees: Who have not completed 3 years of service, Who have not attained age 21, Who are seasonal or less than half-time employees, Who are not in the plan and who are included in a unit of employees covered by a collective bargaining agreement if the class of benefits involved was the subject of good faith bargaining, or Who are nonresident aliens and who receive no earned income from the employer that has United States source income. 2007 income tax online Highly compensated individual. 2007 income tax online   A highly compensated individual is one who: Owned 5 percent or more of the employer at any time during the current year or the preceding year, Received more than $115,000 in compensation from the employer for the preceding year (the amount is annualized for inflation. 2007 income tax online Go to IRS. 2007 income tax online gov, and search “Pension Plan Limitation” for the year), and Was among the top 20% of employees by compensation for the preceding year. 2007 income tax online However, the employer can choose not to have (3) apply. 2007 income tax online Aggregation rules. 2007 income tax online   The employer can choose to treat two or more plans as one plan for purposes of meeting the nondiscrimination requirements. 2007 income tax online Employees of controlled groups of corporations, trades, or businesses under common control, or members of an affiliated service group, are treated as employees of a single employer. 2007 income tax online Leased employees are treated as employees of the recipient. 2007 income tax online One employee. 2007 income tax online   A trust created to provide benefits to one employee will not qualify as a voluntary employees' beneficiary association under section 501(c)(9). 2007 income tax online Supplemental Unemployment Benefit Trusts (501(c)(17)) A trust or trusts forming part of a written plan (established and maintained by an employer, his or her employees, or both) providing solely for the payment of supplemental unemployment compensation benefits must file the application for recognition of exemption on Form 1024. 2007 income tax online The trust must be a valid, existing trust under local law and must be evidenced by an executed document. 2007 income tax online A conformed copy of the plan of which the trust is a part should be attached to the application. 2007 income tax online To be complete, an application must include a copy of the document (such as the trust instrument) by which the organization was created; a full description of the benefits available to participants and the terms and conditions of eligibility for benefits (usually contained in a plan document); and, if providing benefits pursuant to a collective bargaining agreement, a copy of that agreement. 2007 income tax online Note. 2007 income tax online Under section 4976, the reversion of funds from a section 501(c)(17) organization to the employer who created the supplemental unemployment benefit trust may subject the employer to a 100% penalty excise tax on the amount of the reversion. 2007 income tax online Notice requirement. 2007 income tax online   An organization will not be considered tax exempt under this section unless the organization gives notice to the IRS that it is applying for recognition of exempt status. 2007 income tax online The organization gives notice by filing Form 1024. 2007 income tax online If the notice is not given by 15 months after the end of the month in which the organization was created, the organization will not be exempt for any period before such notice is given. 2007 income tax online An extension of time for filing the notice is granted under the same procedures as those described for section 501(c)(3) organizations in chapter 3 under Application for Recognition of Exemption . 2007 income tax online Types of payments. 2007 income tax online   You must show that the supplemental unemployment compensation benefits will be benefits paid to an employee because of the employee's involuntary separation from employment (whether or not the separation is temporary) resulting directly from a reduction-in-force, discontinuance of a plant or operation, or other similar conditions. 2007 income tax online In addition, sickness and accident benefits (but not vacation, retirement, or death benefits) may be included in the plan if these are subordinate to the unemployment compensation benefits. 2007 income tax online Diversion of funds. 2007 income tax online   It must be impossible under the plan (at any time before the satisfaction of all liabilities with respect to employees under the plan) to use or to divert any of the corpus or income of the trust to any purpose other than the payment of supplemental unemployment compensation benefits (or sickness or accident benefits to the extent just explained). 2007 income tax online Discrimination in benefits. 2007 income tax online   Neither the terms of the plan nor the actual payment of benefits can be discriminatory in favor of the company's officers, stockholders, supervisors, or highly paid employees. 2007 income tax online However, a plan is not discriminatory merely because benefits bear a uniform relationship to compensation or the rate of compensation. 2007 income tax online Prohibited transactions and exemption. 2007 income tax online   If your organization is a supplemental unemployment benefit trust and has received a denial of exemption because it engaged in a prohibited transaction, as defined by section 503(b), it can file a claim for exemption in any tax year following the tax year in which the notice of denial was issued. 2007 income tax online It must file the claim on Form 1024. 2007 income tax online The organization must include a written declaration that it will not knowingly again engage in a prohibited transaction. 2007 income tax online An authorized principal officer of your organization must make this declaration under the penalties of perjury. 2007 income tax online   If your organization has satisfied all requirements as a supplemental unemployment benefit trust described in section 501(c)(17), it will be notified in writing that it has been recognized as exempt. 2007 income tax online However, the organization will be exempt only for those tax years after the tax year in which the claim for exemption (Form 1024) is filed. 2007 income tax online Tax year in this case means the established annual accounting period of the organization or, if the organization has not established an annual accounting period, the calendar year. 2007 income tax online For more information about the requirements for reestablishing an exemption previously denied, contact the IRS. 2007 income tax online 501(c)(12) - Local Benevolent Life Insurance Associations, Mutual Irrigation and Telephone Companies, and Like Organizations Each of the following organizations apply for recognition of exemption from federal income tax by filing Form 1024. 2007 income tax online Benevolent life insurance associations of a purely local character and like organizations. 2007 income tax online Mutual ditch or irrigation companies and like organizations. 2007 income tax online Mutual or cooperative telephone companies and like organizations. 2007 income tax online A like organization is an organization that performs a service comparable to that performed by any one of the above organizations. 2007 income tax online The information to be provided upon application by each of these organizations is described in this section. 2007 income tax online For information as to the procedures to follow in applying for exemption, see chapter 1. 2007 income tax online General requirements. 2007 income tax online   These organizations must use their income solely to cover losses and expenses, with any excess being returned to members or retained to cover future losses and expenses. 2007 income tax online They must collect at least 85% of their income from members for the sole purpose of meeting losses and expenses. 2007 income tax online Mutual character. 2007 income tax online   These organizations, other than benevolent life insurance associations, must be organized and operated on a mutual or cooperative basis. 2007 income tax online They are associations of persons or organizations, or both, banded together to provide themselves a mutually desirable service approximately at cost and on a mutual basis. 2007 income tax online To maintain the mutual characteristic of democratic ownership and control, they must be so organized and operated that their members have the right to choose the management, to receive services at cost, to receive a return of any excess of payments over losses and expenses, and to share in any assets upon dissolution. 2007 income tax online   The rights and interests of members in the annual savings of the organization must be determined in proportion to their business with the organization. 2007 income tax online Upon dissolution, gains from the sale of appreciated assets must be distributed to all persons who were members during the period the assets were owned by the organization in proportion to the amount of business done during that period. 2007 income tax online The bylaws must not provide for forfeiture of a member's rights and interest upon withdrawal or termination. 2007 income tax online Membership. 2007 income tax online   Membership of a mutual organization consists of those who join the organization to obtain its services, and have a voice in its management. 2007 income tax online In a stock company, the stockholders are members. 2007 income tax online However, a mutual life insurance organization cannot have policyholders other than its members. 2007 income tax online Losses and expenses. 2007 income tax online   In furnishing services substantially at cost, an organization must use its income solely for paying losses and expenses. 2007 income tax online Any excess income not retained in reasonable reserves for future losses and expenses belongs to members in proportion to their patronage or business done with the organization. 2007 income tax online If such patronage refunds are retained in reasonable amounts for purposes of expanding and improving facilities, retiring capital indebtedness, acquiring other assets, and unexpected expenses, the organization must maintain records sufficient to reflect the equity of each member in the assets acquired with the funds. 2007 income tax online Distributions of proceeds. 2007 income tax online   The cooperative may distribute the unexpended balance of collections or assessments remaining on hand at the end of the year to members or patrons prorated on the basis of their patronage or business done with the cooperative. 2007 income tax online Such distribution represents a refund in the costs of services rendered to the member. 2007 income tax online The 85% Requirement All of the organizations listed above must submit evidence with their application that they receive 85% or more of their gross income from their members for the sole purpose of meeting losses and expenses. 2007 income tax online Nevertheless, certain items of income are excluded from the computation of the 85% requirement if the organization is a mutual or cooperative telephone or electric company. 2007 income tax online Mutual or cooperative telephone company. 2007 income tax online   A mutual or cooperative telephone company will exclude from the computation of the 85% requirement any income received or accrued from: A nonmember telephone company for the performance of communication services involving the completion of long distance calls to, from, or between members of the mutual or cooperative telephone company, Qualified pole rentals, The sale of display listings in a directory furnished to its members, or The prepayment of a loan created in 1987, 1988, or 1989, under section 306A, 306B, or 311 of the Rural Electrification Act of 1936. 2007 income tax online Mutual or cooperative electric company. 2007 income tax online   A mutual or cooperative electric company will exclude from the computation of the 85% requirement any income received or accrued from: Qualified pole rentals, Any provision or sale of electric energy transmission services or ancillary service if the services are provided on a nondiscriminatory open access basis under an open access transmission tariff approved or accepted by the Federal Energy Regulatory Commission (FERC) or under an independent transmission provider agreement approved or accepted by FERC (other than income received or accrued directly or indirectly from a member), The provision or sale of electric energy distribution services or ancillary services if the services are provided on a nondiscriminatory open-access basis to distribute electric energy not owned by the mutual or electric cooperative company: To end-users who are served by distribution facilities not owned by the company or any of its members (other than income received or accrued directly or indirectly from a member), or Generated by a generation facility not owned or leased by the company or any of its members and which is directly connected to distribution facilities owned by the company or any of its members (other than income received or accrued directly or indirectly from a member), Any nuclear decommissioning transaction, or Any asset exchange or conversion transaction. 2007 income tax online   An electric cooperative's sale of excess fuel at cost in the year of purchase is not income for purposes of determining compliance with the 85% requirement. 2007 income tax online Qualified pole rental. 2007 income tax online   The term qualified pole rental means any rental of a pole (or other structure used to support wires) if the pole (or other structure) is used: By the telephone or electric company to support one or more wires that are used by the company in providing telephone or electric services to its members, and Pursuant to the rental to support one or more wires (in addition to wires described in (1)) for use in connection with the transmission by wire of electricity or of telephone or other communications. 2007 income tax online   The term rental, for this purpose, includes any sale of the right to use the pole (or other structure). 2007 income tax online The 85% requirement is applied on the basis of an annual accounting period. 2007 income tax online Failure of an organization to meet the requirement in a particular year precludes exemption for that year, but has no effect upon exemption for years in which the 85% requirement is met. 2007 income tax online Gain from the sale or conversion of the organization's property is not considered an amount received from members in determining whether the organization's income consists of amounts collected from members. 2007 income tax online Because the 85% income test is based on gross income, capital losses cannot be used to reduce capital gains for purposes of this test. 2007 income tax online Example. 2007 income tax online   The books of an organization reflect the following for the calendar year. 2007 income tax online Collections from members $2,400 Short-term capital gains 600 Short-term capital losses 400 Other income None Gross income ($2,400 + $600 =$3000) 100% Collected from members ($2,400) 80%   Since amounts collected from members do not constitute at least 85% of gross income, the organization is not entitled to exemption from federal income tax for the year. 2007 income tax online   Voluntary contributions in the nature of gifts are not taken into account for purposes of the 85% computation. 2007 income tax online   Other tax-exempt income besides gifts is considered as income received from other than members in applying the 85% test. 2007 income tax online   If the 85% test is not met, your organization, if classifiable under this section, will not qualify for exemption as any other type of organization described in this publication. 2007 income tax online Tax treatment of donations. 2007 income tax online   Donations to an organization described in this section are not deductible as charitable contributions on the donor's federal income tax return. 2007 income tax online Local Life Insurance Associations A benevolent life insurance association or an organization seeking recognition of exemption on grounds of similarity to a benevolent life insurance association must submit evidence upon applying for recognition of exemption that it will be of a purely local character, that its excess funds will be refunded to members or retained in reasonable reserves to meet future losses and expenses, and that it meets the 85% income requirement. 2007 income tax online If an organization issues policies for stipulated cash premiums, or if it requires advance deposits to cover the cost of the insurance and maintains investments from which more than 15% of its income is derived, it will not be entitled to exemption. 2007 income tax online To establish that your organization is of a purely local character, it should show that its activities will be confined to a particular community, place, or district irrespective of political subdivisions. 2007 income tax online If the activities of an organization are limited only by the borders of a state, it cannot be purely local in character. 2007 income tax online A benevolent life insurance association that does not terminate membership when a member moves from the local area in which the association operates will qualify for exemption if it meets the other requirements. 2007 income tax online A copy of each type of policy issued by your organization should be included with the application for recognition of exemption. 2007 income tax online Organizations similar to local benevolent life insurance companies. 2007 income tax online   These organizations include those that in addition to paying death benefits also provide for the payment of sick, accident, or health benefits. 2007 income tax online However, an organization that pays only sick, accident, or health benefits, but not life insurance benefits, is not an organization similar to a benevolent life insurance association and should not apply for recognition of exemption as described in this section. 2007 income tax online Burial and funeral benefit insurance organization. 2007 income tax online   This type of organization can apply for recognition of exemption as an organization similar to a benevolent life insurance company if it establishes that the benefits are paid in cash and if it is not engaged directly in the manufacture of funeral supplies or the performance of funeral services. 2007 income tax online An organization that provides its benefits in the form of supplies and service is not a life insurance company. 2007 income tax online Such an organization can seek recognition of exemption from federal income tax, however, as a mutual insurance company other than life. 2007 income tax online Mutual or Cooperative Associations Mutual ditch or irrigation companies, mutual or cooperative telephone companies, and like organizations need not establish that they are of a purely local character. 2007 income tax online They can serve noncontiguous areas. 2007 income tax online Like organization. 2007 income tax online   A like organization is a cooperative or mutual organization that performs a service similar to mutual ditch, irrigation, telephone, or electric companies. 2007 income tax online Examples include the following: cooperatives that provide protection of river banks to prevent erosion, water and sewer services, cable television, satellite, television, cellular phone services, two-way radio service, or natural gas services. 2007 income tax online 501(c)(13) - Cemetery Companies If your organization wishes to obtain recognition of exemption from federal income tax as a cemetery company or a corporation chartered solely for the purpose of the disposal of human bodies by burial or cremation, it must file an application on Form 1024. 2007 income tax online For the procedure to follow to file an application, see Application, Approval, and Appeal Procedures in chapter 1. 2007 income tax online A nonprofit mutual cemetery company that seeks recognition of exemption should submit evidence with its application that it is owned and operated exclusively for the benefit of its lot owners who hold lots for bona fide burial purposes and not for purposes of resale. 2007 income tax online A mutual cemetery company that also engages in charitable activities, such as the burial of paupers, will be regarded as operating within this standard. 2007 income tax online The fact that a mutual cemetery company limits its membership to a particular class of individuals, such as members of a family, will not affect its status as mutual so long as all the other requirements of section 501(c)(13) are met. 2007 income tax online If your organization is a nonprofit corporation chartered solely for the purpose of the disposal of human bodies by burial or cremation, you should show that it is not permitted by its charter to engage in any business not necessarily incident to that purpose. 2007 income tax online Operating a mortuary is not permitted. 2007 income tax online However, selling monuments, markers, vaults, and flowers solely for use in the cemetery is permitted if the profits from these sales are used to maintain the cemetery as a whole. 2007 income tax online How income can be used. 2007 income tax online   You should show that your organization's earnings are or will be used only in one or more of the following ways. 2007 income tax online To pay the ordinary and necessary expenses of operating, maintaining, and improving the cemetery or crematorium. 2007 income tax online To buy cemetery property. 2007 income tax online To create a fund that will provide a source of income for the perpetual care of the cemetery or a reasonable reserve for any ordinary or necessary purpose. 2007 income tax online No part of the net earnings of your organization can inure to the benefit of any private shareholder or individual. 2007 income tax online Ordinary and necessary expenses in connection with the operation, management, maintenance, and improvement of the cemetery are permitted, as are reasonable fees for the services of a manager. 2007 income tax online Buying cemetery property. 2007 income tax online   Payments can be made to amortize debt incurred to buy land, but cannot be in the nature of profit distributions. 2007 income tax online You must show the method used to finance the purchase of the cemetery property and that the purchase price of the land at the time of its sale to the cemetery was not unreasonable. 2007 income tax online   Except for holders of preferred stock (discussed later), no person can have any interest in the net earnings of a tax-exempt cemetery company or crematorium. 2007 income tax online Therefore, if property is transferred to the organization in exchange for an interest in the organization's net earnings, the organization will not
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Mobile App Gallery API Documentation

About the API

The USA.gov Mobile Apps Gallery and GobiernoUSA.gov Aplicaciones (apps) móviles feature mobile apps and websites from government agencies on a variety of platforms in English and Spanish.

The Mobile App Gallery API can be used to retrieve information about all of the apps in the galleries.

If you are using the Mobile App Gallery API and have feedback or want to tell us about your product, please e-mail us.

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Accessing the API

Our Mobile App Gallery API is accessible via HTTP GET requests and does not require a login or API key to use.

The base URL for the API is http://apps.usa.gov/apps-gallery/api/. Append the API call you'd like to make to this URL.

There are 4 URLs available to query against.

Query Examples

Error Handling

  • HTTP Code 500 = internal server error
  • HTTP Code 200 = results found
  • HTTP Code 404 = query error

JSONP

API Data Model

The following fields are associated with mobile apps. Please note that not every record has data in every field, and the API will only return completed fields.

  • Id - Unique Sytem Id of the app.
  • Name – The name of the app.
  • Organization – The agency or organization for the app.
  • Friendly_URL – The URL to the app on the USA.gov or GobiernoUSA.gov App Gallery.
  • Short_Description – A short description of the app.
  • Long_Description – A long description of the app. Please note that the long description may include HTML coding.
  • Language – Whether the app is in English or Spanish.
  • Icon – The path to the icon for the app.
  • Agency - Agency associated with the app as an array.
  • Version_Details - List of version avaiable for the app as an array.

Additionally, each Version Detail secion includes following sub-data elements.

  • Version_Number - This version's number,
  • Published - The date this version of the app was published.
  • Description - Description of this version, should be similar to the registration's long description,
  • Store_Url -The URL to download or access the app.
  • Whats_New - Description of changes or features distinct to this version.
  • Platform - Operating System this version is available for.
  • Device - List of device types this version is available for as an array.
  • Rating - Average rating of this version.
  • Rating_Count - Number of ratings given.
  • Screenshot - List of url paths to screenshots of the app as an array.
  • Video - List of url paths to videos of the app as an array.
  • Language - Whether this version is in English or Spanish.

Results

All results are in json format.

No Results

{
        "metadata": {
            "uri":    "http://apps.usa.gov/apps-gallery/api/registrations.json?Name=NotFound",
            "count":  0,
            "offset": null
        },
        "results": []
    }

Good Results

{
        "metadata": {
            "uri":    "http://apps.usa.gov/apps-gallery/api/registrations.json?limit=3",
            "count":  3,
            "limit":  3,
            "offset": 1
        },
        "results": [ {},{},{} ]
    }

JSONP Results

fname({
        "metadata": {
            "uri":    "http://apps.usa.gov/apps-gallery/api/registrations.json?limit=3&_callback=fname",
            "count":  3,
            "limit":  3,
            "offset": 1
        },
        "results": [ {},{},{} ]
    });

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Terms of Service

By using this data, you agree to the Terms of Service.

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The 2007 Income Tax Online

2007 income tax online 4. 2007 income tax online   Student Loan Interest Deduction Table of Contents Introduction Student Loan Interest DefinedQualified Student Loan Qualified Education Expenses Include As Interest Do Not Include As Interest When Must Interest Be Paid Can You Claim the DeductionNo Double Benefit Allowed Figuring the DeductionEffect of the Amount of Your Income on the Amount of Your Deduction Which Worksheet To Use Claiming the Deduction Introduction Generally, personal interest you pay, other than certain mortgage interest, is not deductible on your tax return. 2007 income tax online However, if your modified adjusted gross income (MAGI) is less than $75,000 ($155,000 if filing a joint return) there is a special deduction allowed for paying interest on a student loan (also known as an education loan) used for higher education. 2007 income tax online For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return before subtracting any deduction for student loan interest. 2007 income tax online This deduction can reduce the amount of your income subject to tax by up to $2,500 in 2013. 2007 income tax online The student loan interest deduction is taken as an adjustment to income. 2007 income tax online This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). 2007 income tax online This chapter explains: What type of loan interest you can deduct, Whether you can claim the deduction, What expenses you must have paid with the student loan, Who is an eligible student, How to figure the deduction, and How to claim the deduction. 2007 income tax online Table 4-1. 2007 income tax online Student Loan Interest Deduction at a Glance This table summarizes the features of the student loan interest deduction. 2007 income tax online Do not rely on this table alone. 2007 income tax online Refer to the text for complete details. 2007 income tax online Feature   Description Maximum benefit   You can reduce your income subject to tax by up to $2,500. 2007 income tax online Loan qualifications   Your student loan: •must have been taken out solely to pay qualified education expenses, and •cannot be from a related person or made under a qualified employer plan. 2007 income tax online Student qualifications   The student must be: •you, your spouse, or your dependent, and  •enrolled at least half-time in a degree program. 2007 income tax online Time limit on deduction   You can deduct interest paid during the remaining period of your student loan. 2007 income tax online Limit on modified adjusted gross income (MAGI)   $155,000 if married filing a joint return; $75,000 if single, head of household, or qualifying widow(er). 2007 income tax online Student Loan Interest Defined Student loan interest is interest you paid during the year on a qualified student loan. 2007 income tax online It includes both required and voluntary interest payments. 2007 income tax online Qualified Student Loan This is a loan you took out solely to pay qualified education expenses (defined later) that were: For you, your spouse, or a person who was your dependent when you took out the loan, Paid or incurred within a reasonable period of time before or after you took out the loan, and For education provided during an academic period for an eligible student. 2007 income tax online Loans from the following sources are not qualified student loans. 2007 income tax online A related person. 2007 income tax online A qualified employer plan. 2007 income tax online Your dependent. 2007 income tax online   Generally, your dependent is someone who is either a: Qualifying child, or Qualifying relative. 2007 income tax online You can find more information about dependents in Publication 501. 2007 income tax online Exceptions. 2007 income tax online   For purposes of the student loan interest deduction, there are the following exceptions to the general rules for dependents. 2007 income tax online An individual can be your dependent even if you are the dependent of another taxpayer. 2007 income tax online An individual can be your dependent even if the individual files a joint return with a spouse. 2007 income tax online An individual can be your dependent even if the individual had gross income for the year that was equal to or more than the exemption amount for the year ($3,900 for 2013). 2007 income tax online Reasonable period of time. 2007 income tax online   Qualified education expenses are treated as paid or incurred within a reasonable period of time before or after you take out the loan if they are paid with the proceeds of student loans that are part of a federal postsecondary education loan program. 2007 income tax online   Even if not paid with the proceeds of that type of loan, the expenses are treated as paid or incurred within a reasonable period of time if both of the following requirements are met. 2007 income tax online The expenses relate to a specific academic period, and The loan proceeds are disbursed within a period that begins 90 days before the start of that academic period and ends 90 days after the end of that academic period. 2007 income tax online   If neither of the above situations applies, the reasonable period of time usually is determined based on all the relevant facts and circumstances. 2007 income tax online Academic period. 2007 income tax online   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. 2007 income tax online In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. 2007 income tax online Eligible student. 2007 income tax online   This is a student who was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. 2007 income tax online Enrolled at least half-time. 2007 income tax online   A student was enrolled at least half-time if the student was taking at least half the normal full-time work load for his or her course of study. 2007 income tax online   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. 2007 income tax online However, the standard may not be lower than any of those established by the U. 2007 income tax online S. 2007 income tax online Department of Education under the Higher Education Act of 1965. 2007 income tax online Related person. 2007 income tax online   You cannot deduct interest on a loan you get from a related person. 2007 income tax online Related persons include: Your spouse, Your brothers and sisters, Your half brothers and half sisters, Your ancestors (parents, grandparents, etc. 2007 income tax online ), Your lineal descendants (children, grandchildren, etc. 2007 income tax online ), and Certain corporations, partnerships, trusts, and exempt organizations. 2007 income tax online Qualified employer plan. 2007 income tax online   You cannot deduct interest on a loan made under a qualified employer plan or under a contract purchased under such a plan. 2007 income tax online Qualified Education Expenses For purposes of the student loan interest deduction, these expenses are the total costs of attending an eligible educational institution, including graduate school. 2007 income tax online They include amounts paid for the following items. 2007 income tax online Tuition and fees. 2007 income tax online Room and board. 2007 income tax online Books, supplies, and equipment. 2007 income tax online Other necessary expenses (such as transportation). 2007 income tax online The cost of room and board qualifies only to the extent that it is not more than the greater of: The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student, or The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. 2007 income tax online Eligible educational institution. 2007 income tax online   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. 2007 income tax online S. 2007 income tax online Department of Education. 2007 income tax online It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. 2007 income tax online   Certain educational institutions located outside the United States also participate in the U. 2007 income tax online S. 2007 income tax online Department of Education's Federal Student Aid (FSA) programs. 2007 income tax online   For purposes of the student loan interest deduction, an eligible educational institution also includes an institution conducting an internship or residency program leading to a degree or certificate from an institution of higher education, a hospital, or a health care facility that offers postgraduate training. 2007 income tax online   An educational institution must meet the above criteria only during the academic period(s) for which the student loan was incurred. 2007 income tax online The deductibility of interest on the loan is not affected by the institution's subsequent loss of eligibility. 2007 income tax online    The educational institution should be able to tell you if it is an eligible educational institution. 2007 income tax online Adjustments to Qualified Education Expenses You must reduce your qualified education expenses by the total amount paid for them with the following tax-free items. 2007 income tax online Employer-provided educational assistance. 2007 income tax online See chapter 11, Employer-Provided Educational Assistance . 2007 income tax online Tax-free distribution of earnings from a Coverdell education savings account (ESA). 2007 income tax online See Tax-Free Distributions in chapter 7, Coverdell Education Savings Account. 2007 income tax online Tax-free distribution of earnings from a qualified tuition program (QTP). 2007 income tax online See Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program. 2007 income tax online U. 2007 income tax online S. 2007 income tax online savings bond interest that you exclude from income because it is used to pay qualified education expenses. 2007 income tax online See chapter 10, Education Savings Bond Program . 2007 income tax online The tax-free part of scholarships and fellowships. 2007 income tax online See Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. 2007 income tax online Veterans' educational assistance. 2007 income tax online See Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. 2007 income tax online Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. 2007 income tax online Include As Interest In addition to simple interest on the loan, if all other requirements are met, the items discussed below can be student loan interest. 2007 income tax online Loan origination fee. 2007 income tax online   In general, this is a one-time fee charged by the lender when a loan is made. 2007 income tax online To be deductible as interest, a loan origination fee must be for the use of money rather than for property or services (such as commitment fees or processing costs) provided by the lender. 2007 income tax online A loan origination fee treated as interest accrues over the term of the loan. 2007 income tax online   Loan origination fees were not required to be reported on Form 1098-E, Student Loan Interest Statement, for loans made before September 1, 2004. 2007 income tax online If loan origination fees are not included in the amount reported on your Form 1098-E, you can use any reasonable method to allocate the loan origination fees over the term of the loan. 2007 income tax online The method shown in the example below allocates equal portions of the loan origination fee to each payment required under the terms of the loan. 2007 income tax online A method that results in the double deduction of the same portion of a loan origination fee would not be reasonable. 2007 income tax online Example. 2007 income tax online In August 2004, Bill took out a student loan for $16,000 to pay the tuition for his senior year of college. 2007 income tax online The lender charged a 3% loan origination fee ($480) that was withheld from the funds Bill received. 2007 income tax online Bill began making payments on his student loan in 2013. 2007 income tax online Because the loan origination fee was not included in his 2013 Form 1098-E, Bill can use any reasonable method to allocate that fee over the term of the loan. 2007 income tax online Bill's loan is payable in 120 equal monthly payments. 2007 income tax online He allocates the $480 fee equally over the total number of payments ($480 ÷ 120 months = $4 per month). 2007 income tax online Bill made 7 payments in 2013, so he paid $28 ($4 × 7) of interest attributable to the loan origination fee. 2007 income tax online To determine his student loan interest deduction, he will add the $28 to the amount of other interest reported to him on Form 1098-E. 2007 income tax online Capitalized interest. 2007 income tax online   This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. 2007 income tax online Capitalized interest is treated as interest for tax purposes and is deductible as payments of principal are made on the loan. 2007 income tax online No deduction for capitalized interest is allowed in a year in which no loan payments were made. 2007 income tax online Interest on revolving lines of credit. 2007 income tax online   This interest, which includes interest on credit card debt, is student loan interest if the borrower uses the line of credit (credit card) only to pay qualified education expenses. 2007 income tax online See Qualified Education Expenses , earlier. 2007 income tax online Interest on refinanced student loans. 2007 income tax online   This includes interest on both: Consolidated loans—loans used to refinance more than one student loan of the same borrower, and Collapsed loans—two or more loans of the same borrower that are treated by both the lender and the borrower as one loan. 2007 income tax online    If you refinance a qualified student loan for more than your original loan and you use the additional amount for any purpose other than qualified education expenses, you cannot deduct any interest paid on the refinanced loan. 2007 income tax online Voluntary interest payments. 2007 income tax online   These are payments made on a qualified student loan during a period when interest payments are not required, such as when the borrower has been granted a deferment or the loan has not yet entered repayment status. 2007 income tax online Example. 2007 income tax online The payments on Roger's student loan were scheduled to begin in June 2012, 6 months after he graduated from college. 2007 income tax online He began making payments as required. 2007 income tax online In September 2013, Roger enrolled in graduate school on a full-time basis. 2007 income tax online He applied for and was granted deferment of his loan payments while in graduate school. 2007 income tax online Wanting to pay down his student loan as much as possible, he made loan payments in October and November 2013. 2007 income tax online Even though these were voluntary (not required) payments, Roger can deduct the interest paid in October and November. 2007 income tax online Allocating Payments Between Interest and Principal The allocation of payments between interest and principal for tax purposes might not be the same as the allocation shown on the Form 1098-E or other statement you receive from the lender or loan servicer. 2007 income tax online To make the allocation for tax purposes, a payment generally applies first to stated interest that remains unpaid as of the date the payment is due, second to any loan origination fees allocable to the payment, third to any capitalized interest that remains unpaid as of the date the payment is due, and fourth to the outstanding principal. 2007 income tax online Example. 2007 income tax online In August 2012, Peg took out a $10,000 student loan to pay the tuition for her senior year of college. 2007 income tax online The lender charged a 3% loan origination fee ($300) that was withheld from the funds Peg received. 2007 income tax online The interest (5% simple) on this loan accrued while she completed her senior year and for 6 months after she graduated. 2007 income tax online At the end of that period, the lender determined the amount to be repaid by capitalizing all accrued but unpaid interest ($625 interest accrued from August 2012 through October 2013) and adding it to the outstanding principal balance of the loan. 2007 income tax online The loan is payable over 60 months, with a payment of $200. 2007 income tax online 51 due on the first of each month, beginning November 2013. 2007 income tax online Peg did not receive a Form 1098-E for 2013 from her lender because the amount of interest she paid did not require the lender to issue an information return. 2007 income tax online However, she did receive an account statement from the lender that showed the following 2013 payments on her outstanding loan of $10,625 ($10,000 principal + $625 accrued but unpaid interest). 2007 income tax online Payment Date   Payment   Stated Interest   Principal November 2013   $200. 2007 income tax online 51   $44. 2007 income tax online 27   $156. 2007 income tax online 24 December 2013   $200. 2007 income tax online 51   $43. 2007 income tax online 62   $156. 2007 income tax online 89 Totals   $401. 2007 income tax online 02   $87. 2007 income tax online 89   $313. 2007 income tax online 13 To determine the amount of interest that could be deducted on the loan for 2013, Peg starts with the total amount of stated interest she paid, $87. 2007 income tax online 89. 2007 income tax online Next, she allocates the loan origination fee over the term of the loan ($300 ÷ 60 months = $5 per month). 2007 income tax online A total of $10 ($5 of each of the two principal payments) should be treated as interest for tax purposes. 2007 income tax online Peg then applies the unpaid capitalized interest ($625) to the two principal payments in the order in which they were made, and determines that the remaining amount of principal of both payments is treated as interest for tax purposes. 2007 income tax online Assuming that Peg qualifies to take the student loan interest deduction, she can deduct $401. 2007 income tax online 02 ($87. 2007 income tax online 89 + $10 + $303. 2007 income tax online 13). 2007 income tax online For 2014, Peg will continue to allocate $5 of the loan origination fee to the principal portion of each monthly payment she makes and treat that amount as interest for tax purposes. 2007 income tax online She also will apply the remaining amount of capitalized interest ($625 − $303. 2007 income tax online 13 = $321. 2007 income tax online 87) to the principal payments in the order in which they are made until the balance is zero, and treat those amounts as interest for tax purposes. 2007 income tax online Do Not Include As Interest You cannot claim a student loan interest deduction for any of the following items. 2007 income tax online Interest you paid on a loan if, under the terms of the loan, you are not legally obligated to make interest payments. 2007 income tax online Loan origination fees that are payments for property or services provided by the lender, such as commitment fees or processing costs. 2007 income tax online Interest you paid on a loan to the extent payments were made through your participation in the National Health Service Corps Loan Repayment Program (the “NHSC Loan Repayment Program”) or certain other loan repayment assistance programs. 2007 income tax online For more information, see Student Loan Repayment Assistance in chapter 5, Student Loan Cancellations and Repayment Assistance. 2007 income tax online When Must Interest Be Paid You can deduct all interest you paid during the year on your student loan, including voluntary payments, until the loan is paid off. 2007 income tax online Can You Claim the Deduction Generally, you can claim the deduction if all of the following requirements are met. 2007 income tax online Your filing status is any filing status except married filing separately. 2007 income tax online No one else is claiming an exemption for you on his or her tax return. 2007 income tax online You are legally obligated to pay interest on a qualified student loan. 2007 income tax online You paid interest on a qualified student loan. 2007 income tax online Claiming an exemption for you. 2007 income tax online   Another taxpayer is claiming an exemption for you if he or she lists your name and other required information on his or her Form 1040 (or Form 1040A), line 6c, or Form 1040NR, line 7c. 2007 income tax online Example 1. 2007 income tax online During 2013, Josh paid $600 interest on his qualified student loan. 2007 income tax online Only he is legally obligated to make the payments. 2007 income tax online No one claimed an exemption for Josh for 2013. 2007 income tax online Assuming all other requirements are met, Josh can deduct the $600 of interest he paid on his 2013 Form 1040 or 1040A. 2007 income tax online Example 2. 2007 income tax online During 2013, Jo paid $1,100 interest on her qualified student loan. 2007 income tax online Only she is legally obligated to make the payments. 2007 income tax online Jo's parents claimed an exemption for her on their 2013 tax return. 2007 income tax online In this case, neither Jo nor her parents may deduct the student loan interest Jo paid in 2013. 2007 income tax online Interest paid by others. 2007 income tax online   If you are the person legally obligated to make interest payments and someone else makes a payment of interest on your behalf, you are treated as receiving the payments from the other person and, in turn, paying the interest. 2007 income tax online Example 1. 2007 income tax online Darla obtained a qualified student loan to attend college. 2007 income tax online After Darla's graduation from college, she worked as an intern for a nonprofit organization. 2007 income tax online As part of the internship program, the nonprofit organization made an interest payment on behalf of Darla. 2007 income tax online This payment was treated as additional compensation and reported in box 1 of her Form W-2. 2007 income tax online Assuming all other qualifications are met, Darla can deduct this payment of interest on her tax return. 2007 income tax online Example 2. 2007 income tax online Ethan obtained a qualified student loan to attend college. 2007 income tax online After graduating from college, the first monthly payment on his loan was due in December. 2007 income tax online As a gift, Ethan's mother made this payment for him. 2007 income tax online No one is claiming a dependency exemption for Ethan on his or her tax return. 2007 income tax online Assuming all other qualifications are met, Ethan can deduct this payment of interest on his tax return. 2007 income tax online No Double Benefit Allowed You cannot deduct as interest on a student loan any amount that is an allowable deduction under any other provision of the tax law (for example, as home mortgage interest). 2007 income tax online Figuring the Deduction Your student loan interest deduction for 2013 is generally the smaller of: $2,500, or The interest you paid in 2013. 2007 income tax online However, the amount determined above may be gradually reduced (phased out) or eliminated based on your filing status and MAGI as explained below. 2007 income tax online You can use Worksheet 4-1. 2007 income tax online Student Loan Interest Deduction Worksheet (at the end of this chapter) to figure both your MAGI and your deduction. 2007 income tax online Form 1098-E. 2007 income tax online   To help you figure your student loan interest deduction, you should receive Form 1098-E. 2007 income tax online Generally, an institution (such as a bank or governmental agency) that received interest payments of $600 or more during 2013 on one or more qualified student loans must send Form 1098-E (or acceptable substitute) to each borrower by January 31, 2014. 2007 income tax online   For qualified student loans taken out before September 1, 2004, the institution is required to include on Form 1098-E only payments of stated interest. 2007 income tax online Other interest payments, such as certain loan origination fees and capitalized interest, may not appear on the form you receive. 2007 income tax online However, if you pay qualifying interest that is not included on Form 1098-E, you can also deduct those amounts. 2007 income tax online See Allocating Payments Between Interest and Principal , earlier. 2007 income tax online    The lender may ask for a completed Form W-9S, or similar statement to obtain the borrower's name, address, and taxpayer identification number. 2007 income tax online The form may also be used by the borrower to certify that the student loan was incurred solely to pay for qualified education expenses. 2007 income tax online Effect of the Amount of Your Income on the Amount of Your Deduction The amount of your student loan interest deduction is phased out (gradually reduced) if your MAGI is between $60,000 and $75,000 ($125,000 and $155,000 if you file a joint return). 2007 income tax online You cannot take a student loan interest deduction if your MAGI is $75,000 or more ($155,000 or more if you file a joint return). 2007 income tax online Modified adjusted gross income (MAGI). 2007 income tax online   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return before subtracting any deduction for student loan interest. 2007 income tax online However, as discussed below, there may be other modifications. 2007 income tax online Table 4-2 shows how the amount of your MAGI can affect your student loan interest deduction. 2007 income tax online Table 4-2. 2007 income tax online Effect of MAGI on Student Loan Interest Deduction IF your filing status is. 2007 income tax online . 2007 income tax online . 2007 income tax online AND your MAGI is. 2007 income tax online . 2007 income tax online . 2007 income tax online THEN your student loan interest deduction is. 2007 income tax online . 2007 income tax online . 2007 income tax online single,  head of household, or qualifying widow(er) not more than $60,000 not affected by the phaseout. 2007 income tax online more than $60,000  but less than $75,000 reduced because of the phaseout. 2007 income tax online $75,000 or more eliminated by the phaseout. 2007 income tax online married filing joint return not more than $125,000 not affected by the phaseout. 2007 income tax online more than $125,000 but less than $155,000 reduced because of the phaseout. 2007 income tax online $155,000 or more eliminated by the phaseout. 2007 income tax online MAGI when using Form 1040A. 2007 income tax online   If you file Form 1040A, your MAGI is the AGI on line 22 of that form figured without taking into account any amount on line 18 (student loan interest deduction) and line 19 (tuition and fees deduction). 2007 income tax online MAGI when using Form 1040. 2007 income tax online   If you file Form 1040, your MAGI is the AGI on line 38 of that form figured without taking into account any amount on line 33 (student loan interest deduction), line 34 (tuition and fees deduction), or line 35 (domestic production activities deduction), and modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. 2007 income tax online MAGI when using Form 1040NR. 2007 income tax online   If you file Form 1040NR, your MAGI is the AGI on line 36 of that form figured without taking into account any amount on line 33 (student loan interest deduction) and line 34 (domestic production activities deduction). 2007 income tax online MAGI when using Form 1040NR-EZ. 2007 income tax online   If you file Form 1040NR-EZ, your MAGI is the AGI on line 10 of that form figured without taking into account any amount on line 9 (student loan interest deduction). 2007 income tax online Phaseout. 2007 income tax online   If your MAGI is within the range of incomes where the credit must be reduced, you must figure your reduced deduction. 2007 income tax online To figure the phaseout, multiply your interest deduction (before the phaseout) by a fraction. 2007 income tax online The numerator is your MAGI minus $60,000 ($125,000 in the case of a joint return). 2007 income tax online The denominator is $15,000 ($30,000 in the case of a joint return). 2007 income tax online Subtract the result from your deduction (before the phaseout) to give you the amount you can deduct. 2007 income tax online Example 1. 2007 income tax online During 2013 you paid $800 interest on a qualified student loan. 2007 income tax online Your 2013 MAGI is $145,000 and you are filing a joint return. 2007 income tax online You must reduce your deduction by $533, figured as follows. 2007 income tax online   $800 × $145,000 − $125,000  $30,000 = $533   Your reduced student loan interest deduction is $267 ($800 − $533). 2007 income tax online Example 2. 2007 income tax online The facts are the same as in Example 1 except that you paid $2,750 interest. 2007 income tax online Your maximum deduction for 2013 is $2,500. 2007 income tax online You must reduce your maximum deduction by $1,667, figured as follows. 2007 income tax online   $2,500 × $145,000 − $125,000  $30,000 = $1,667   In this example, your reduced student loan interest deduction is $833 ($2,500 − $1,667). 2007 income tax online Which Worksheet To Use Generally, you figure the deduction using the Student Loan Interest Deduction Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR. 2007 income tax online However, if you are filing Form 2555, Foreign Earned Income, Form 2555-EZ, Foreign Earned Income Exclusion, or 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. 2007 income tax online Student Loan Interest Deduction Worksheet at the end of this chapter. 2007 income tax online Claiming the Deduction The student loan interest deduction is an adjustment to income. 2007 income tax online To claim the deduction, enter the allowable amount on line 33 (Form 1040), line 18 (Form 1040A), line 33 (Form 1040NR), or line 9 (Form 1040NR-EZ). 2007 income tax online Worksheet 4-1. 2007 income tax online Student Loan Interest Deduction Worksheet Use this worksheet instead of the worksheet in the Form 1040 instructions if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico. 2007 income tax online Before using this worksheet, you must complete Form 1040, lines 7 through 32, plus any amount to be entered on the dotted line next to line 36. 2007 income tax online 1. 2007 income tax online Enter the total interest you paid in 2013 on qualified student loans. 2007 income tax online Do not enter  more than $2,500 1. 2007 income tax online   2. 2007 income tax online Enter the amount from Form 1040, line 22 2. 2007 income tax online       3. 2007 income tax online Enter the total of the amounts from Form 1040,  lines 23 through 32 3. 2007 income tax online           4. 2007 income tax online Enter the total of any amounts entered on the dotted line next to Form 1040, line 36 4. 2007 income tax online           5. 2007 income tax online Add lines 3 and 4 5. 2007 income tax online       6. 2007 income tax online Subtract line 5 from line 2 6. 2007 income tax online       7. 2007 income tax online Enter any foreign earned income exclusion and/or housing  exclusion (Form 2555, line 45, or Form 2555-EZ, line 18) 7. 2007 income tax online       8. 2007 income tax online Enter any foreign housing deduction (Form 2555, line 50) 8. 2007 income tax online       9. 2007 income tax online Enter the amount of income from Puerto Rico you are excluding 9. 2007 income tax online       10. 2007 income tax online Enter the amount of income from American Samoa  you are excluding (Form 4563, line 15) 10. 2007 income tax online       11. 2007 income tax online Add lines 6 through 10. 2007 income tax online This is your modified adjusted gross income 11. 2007 income tax online   12. 2007 income tax online Enter the amount shown below for your filing status 12. 2007 income tax online     •Single, head of household, or qualifying widow(er)—$60,000       •Married filing jointly—$125,000     13. 2007 income tax online Is the amount on line 11 more than the amount on line 12?       □ No. 2007 income tax online Skip lines 13 and 14, enter -0- on line 15, and go to line 16. 2007 income tax online       □ Yes. 2007 income tax online Subtract line 12 from line 11 13. 2007 income tax online   14. 2007 income tax online Divide line 13 by $15,000 ($30,000 if married filing jointly). 2007 income tax online Enter the result as a decimal  (rounded to at least three places). 2007 income tax online If the result is 1. 2007 income tax online 000 or more, enter 1. 2007 income tax online 000 14. 2007 income tax online . 2007 income tax online 15. 2007 income tax online Multiply line 1 by line 14 15. 2007 income tax online   16. 2007 income tax online Student loan interest deduction. 2007 income tax online Subtract line 15 from line 1. 2007 income tax online Enter the result here  and on Form 1040, line 33. 2007 income tax online Do not include this amount in figuring any other  deduction on your return (such as on Schedule A, C, E, etc. 2007 income tax online ) 16. 2007 income tax online   Prev  Up  Next   Home   More Online Publications