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File state taxes only Publication 925 - Introductory Material Table of Contents Future Developments Reminders IntroductionOrdering forms and publications. File state taxes only Tax questions. File state taxes only Useful Items - You may want to see: Future Developments For the latest developments related to Publication 925, such as legislation enacted after it was published, go to www. File state taxes only irs. File state taxes only gov/pub925. File state taxes only Reminders At-risk amounts. File state taxes only  The following rules apply to amounts borrowed after May 3, 2004. File state taxes only You must file Form 6198, At-Risk Limitations, if you are engaged in an activity included in (6) under Activities Covered by the At-Risk Rules and you have borrowed certain amounts described in Certain borrowed amounts excluded under At-Risk Amounts in this publication. File state taxes only You may be considered at risk for certain amounts described in Certain borrowed amounts excluded under At-Risk Amounts secured by real property used in the activity of holding real property (other than mineral property) that, if nonrecourse, would be qualified nonrecourse financing. File state taxes only Photographs of missing children. File state taxes only  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. File state taxes only Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. File state taxes only You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. File state taxes only Introduction This publication discusses two sets of rules that may limit the amount of your deductible loss from a trade, business, rental, or other income-producing activity. File state taxes only The first part of the publication discusses the passive activity rules. File state taxes only The second part discusses the at-risk rules. File state taxes only However, when you figure your allowable losses from any activity, you must apply the at-risk rules before the passive activity rules. File state taxes only Comments and suggestions. File state taxes only   We welcome your comments about this publication and your suggestions for future editions. File state taxes only   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. File state taxes only NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. File state taxes only Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. File state taxes only   You can send your comments from www. File state taxes only irs. File state taxes only gov/formspubs/. File state taxes only Click on “More Information” and then on “Comment on Tax Forms and Publications. File state taxes only ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. File state taxes only Ordering forms and publications. File state taxes only   Visit www. File state taxes only irs. File state taxes only gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. File state taxes only Internal Revenue Service 1201 N. File state taxes only Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. File state taxes only   If you have a tax question, check the information available on IRS. File state taxes only gov or call 1-800-829-1040. File state taxes only We cannot answer tax questions sent to either of the above addresses. File state taxes only Useful Items - You may want to see: Publication 527 Residential Rental Property (Including Rental of Vacation Homes) 541 Partnerships Form (and Instructions) 4952 Investment Interest Expense Deduction 6198 At-Risk Limitations 8582 Passive Activity Loss Limitations 8582-CR Passive Activity Credit Limitations 8810 Corporate Passive Activity Loss and Credit Limitations 8949 Sales and Other Dispositions of Capital Assets See How To Get Tax Help near the end of this publication for information about getting these publications and forms. File state taxes only Prev  Up  Next   Home   More Online Publications
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IRS Letters and Visits to Return Preparers

The Internal Revenue Service sends many letters annually to federal tax return preparers. Beginning in November 2013, the agency began its fifth year of a hands-on effort to improve the accuracy and quality of filed tax returns and to heighten awareness of preparer responsibilities. Approximately 12,000 letters will be sent to tax return preparers nationwide. Types of letters sent include:

Letter 4810 - Sent in November 2013 advising the recipient that an IRS representative will contact them to schedule an educational visit to review their responsibilities in correctly preparing the Schedule C.

Letter 5105 - Sent in December 2013 recommending the recipient review all Schedule C and preparer due diligence rules, as well as pay special attention to Schedule C accuracy in 2014.

Letter 5271 - Sent in December 2013 recommending the recipient review all Additional Child Tax Credit (ACTC) and preparer due diligence rules, as well as pay special attention to ACTC accuracy in 2014.

Letter 5272 - Sent in December 2013 recommending the recipient review all Additional Child Tax Credit (ACTC) and preparer due diligence rules, as well as pay special attention to ACTC accuracy in 2014 on returns where dependents have an Individual Tax Identification Number (ITIN).

Letter 5292 - Sent in November 2013 advising the recipient that an IRS representative will contact them to schedule an educational visit to review their responsibilities in correctly following preparer tax identification number (PTIN) rules.

The IRS also regularly checks whether federal tax return preparers are compliant with their own tax filing and payment responsibilities.

Letter 4911 - Sent to notify paid tax return preparers that they are not compliant with their personal tax responsibilities and should resolve the matter to avoid affecting their status as a preparer tax identification number (PTIN) holder.

IRS Letters and Visits to Return Preparers: FAQs

 

 

Page Last Reviewed or Updated: 19-Dec-2013

The File State Taxes Only

File state taxes only 19. File state taxes only   Education- Related Adjustments Table of Contents Introduction Useful Items - You may want to see: Student Loan Interest DeductionStudent Loan Interest Defined Can You Claim the Deduction How Much Can You Deduct How Do You Figure the Deduction Tuition and Fees DeductionCan You Claim the Deduction What Expenses Qualify Who Is an Eligible Student Who Can Claim a Dependent's Expenses How Much Can You Deduct Educator Expenses Introduction This chapter discusses the education-related adjustment you can deduct in figuring your adjusted gross income. File state taxes only This chapter covers the student loan interest deduction, tuition and fees deduction, and the deduction for educator expenses. File state taxes only Useful Items - You may want to see: Publication 970 Tax Benefits for Education Student Loan Interest Deduction Generally, personal interest you pay, other than certain mortgage interest, is not deductible on your tax return. File state taxes only 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. File state taxes only 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. File state taxes only This deduction can reduce the amount of your income subject to tax by up to $2,500 in 2013. File state taxes only Table 19-1 summarizes the features of the student loan interest deduction. File state taxes only Table 19-1. File state taxes only Student Loan Interest Deduction at a Glance Do not rely on this table alone. File state taxes only Refer to the text for more details. File state taxes only Feature Description Maximum benefit You can reduce your income subject to tax by up to $2,500. File state taxes only 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. File state taxes only Student qualifications The student must be: • you, your spouse, or your dependent, and   • enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential at an eligible educational institution. File state taxes only Time limit on deduction You can deduct interest paid during the remaining period of your student loan. File state taxes only Phaseout The amount of your deduction depends on your income level. File state taxes only Student Loan Interest Defined Student loan interest is interest you paid during the year on a qualified student loan. File state taxes only It includes both required and voluntary interest payments. File state taxes only 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 (defined in chapter 3) 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 when the student is an eligible student. File state taxes only Loans from the following sources are not qualified student loans. File state taxes only A related person. File state taxes only A qualified employer plan. File state taxes only Exceptions. File state taxes only   For purposes of the student loan interest deduction, the following are exceptions to the general rules for dependents. File state taxes only An individual can be your dependent even if you are the dependent of another taxpayer. File state taxes only An individual can be your dependent even if the individual files a joint return with a spouse. File state taxes only 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). File state taxes only    Reasonable period of time. File state taxes only   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. File state taxes only   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. File state taxes only The expenses relate to a specific academic period. File state taxes only 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. File state taxes only   If neither of the above situations applies, the reasonable period of time is determined based on all the relevant facts and circumstances. File state taxes only Academic period. File state taxes only   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. File state taxes only 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. File state taxes only Eligible student. File state taxes only   This is a student who was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. File state taxes only Enrolled at least half-time. File state taxes only   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. File state taxes only   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. File state taxes only However, the standard may not be lower than any of those established by the U. File state taxes only S. File state taxes only Department of Education under the Higher Education Act of 1965. File state taxes only Related person. File state taxes only   You cannot deduct interest on a loan you get from a related person. File state taxes only Related persons include: Your spouse, Your brothers and sisters, Your half brothers and half sisters, Your ancestors (parents, grandparents, etc. File state taxes only ), Your lineal descendants (children, grandchildren, etc. File state taxes only ), and Certain corporations, partnerships, trusts, and exempt organizations. File state taxes only Qualified employer plan. File state taxes only   You cannot deduct interest on a loan made under a qualified employer plan or under a contract purchased under such a plan. File state taxes only 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. File state taxes only They include amounts paid for the following items. File state taxes only Tuition and fees. File state taxes only Room and board. File state taxes only Books, supplies, and equipment. File state taxes only Other necessary expenses (such as transportation). File state taxes only The cost of room and board qualifies only to the extent that it is not more than: 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 If greater, the actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. File state taxes only Eligible educational institution. File state taxes only   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. File state taxes only S. File state taxes only Department of Education. File state taxes only It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. File state taxes only   Certain educational institutions located outside the United States also participate in the U. File state taxes only S. File state taxes only Department of Education's Federal Student Aid (FSA) programs. File state taxes only   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. File state taxes only   An educational institution must meet the above criteria only during the academic period(s) for which the student loan was incurred. File state taxes only The deductibility of interest on the loan is not affected by the institution's subsequent loss of eligibility. File state taxes only    The educational institution should be able to tell you if it is an eligible educational institution. File state taxes only Adjustments to qualified education expenses. File state taxes only   You must reduce your qualified education expenses by certain tax-free items (such as the tax-free part of scholarships and fellowships). File state taxes only See chapter 4 of Publication 970 for details. File state taxes only Include as Interest In addition to simple interest on the loan, certain loan origination fees, capitalized interest, interest on revolving lines of credit, and interest on refinanced student loans can be student loan interest if all other requirements are met. File state taxes only Loan origination fee. File state taxes only   In general, this is a one-time fee charged by the lender when a loan is made. File state taxes only To be deductible as interest, the 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. File state taxes only A loan origination fee treated as interest accrues over the life of the loan. File state taxes only Capitalized interest. File state taxes only    This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. File state taxes only Interest on revolving lines of credit. File state taxes only   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. File state taxes only See Qualified Education Expenses , earlier. File state taxes only Interest on refinanced student loans. File state taxes only   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. File state taxes only 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. File state taxes only Voluntary interest payments. File state taxes only   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. File state taxes only Do Not Include as Interest You cannot claim a student loan interest deduction for any of the following items. File state taxes only Interest you paid on a loan if, under the terms of the loan, you are not legally obligated to make interest payments. File state taxes only Loan origination fees that are payments for property or services provided by the lender, such as commitment fees or processing costs. File state taxes only 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. File state taxes only For more information, see Student Loan Repayment Assistance in chapter 5 of Publication 970. File state taxes only Can You Claim the Deduction Generally, you can claim the deduction if all of the following requirements are met. File state taxes only Your filing status is any filing status except married filing separately. File state taxes only No one else is claiming an exemption for you on his or her tax return. File state taxes only You are legally obligated to pay interest on a qualified student loan. File state taxes only You paid interest on a qualified student loan. File state taxes only Interest paid by others. File state taxes only   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. File state taxes only See chapter 4 of Publication 970 for more information. File state taxes only 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, home mortgage interest). File state taxes only How Much Can You Deduct Your student loan interest deduction for 2013 is generally the smaller of: $2,500, or The interest you paid in 2013. File state taxes only However, the amount determined above 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). File state taxes only 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). File state taxes only For details on figuring your MAGI, see chapter 4 of Publication 970. File state taxes only How Do You Figure the Deduction Generally, you figure the deduction using the Student Loan Interest Deduction Worksheet in the Form 1040 or Form 1040A instructions. File state taxes only However, if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico, you must complete Worksheet 4-1 in chapter 4 of Publication 970. File state taxes only To help you figure your student loan interest deduction, you should receive Form 1098-E, Student Loan Interest Statement. File state taxes only 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. File state taxes only 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. File state taxes only Other interest payments, such as certain loan origination fees and capitalized interest, may not appear on the form you receive. File state taxes only However, if you pay qualifying interest that is not included on Form 1098-E, you can also deduct those amounts. File state taxes only For information on allocating payments between interest and principal, see chapter 4 of Publication 970. File state taxes only To claim the deduction, enter the allowable amount on Form 1040, line 33, or Form 1040A, line 18. File state taxes only Tuition and Fees Deduction You may be able to deduct qualified education expenses paid during the year for yourself, your spouse, or your dependent(s). File state taxes only You cannot claim this deduction if your filing status is married filing separately or if another person can claim an exemption for you as a dependent on his or her tax return. File state taxes only The qualified expenses must be for higher education, as explained later under What Expenses Qualify . File state taxes only The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. File state taxes only Table 19-2 summarizes the features of the tuition and fees deduction. File state taxes only You may be able to take a credit for your education expenses instead of a deduction. File state taxes only You can choose the one that will give you the lower tax. File state taxes only See chapter 35, Education Credits, for details about the credits. File state taxes only Can You Claim the Deduction The following rules will help you determine if you can claim the tuition and fees deduction. File state taxes only Who Can Claim the Deduction Generally, you can claim the tuition and fees deduction if all three of the following requirements are met. File state taxes only You paid qualified education expenses of higher education in 2013 for academic periods beginning in 2013 and those beginning in the first three months of 2014. File state taxes only You paid the education expenses for an eligible student. File state taxes only The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption (defined in chapter 3) on your tax return. File state taxes only Qualified education expenses are defined under What Expenses Qualify . File state taxes only Eligible students are defined later under Who Is an Eligible Student . File state taxes only Who Cannot Claim the Deduction You cannot claim the tuition and fees deduction if any of the following apply. File state taxes only Your filing status is married filing separately. File state taxes only Another person can claim an exemption for you as a dependent on his or her tax return. File state taxes only You cannot take the deduction even if the other person does not actually claim that exemption. File state taxes only Your modified adjusted gross income (MAGI) is more than $80,000 ($160,000 if filing a joint return). File state taxes only You (or your spouse) were a nonresident alien for any part of 2013 and the nonresident alien did not elect to be treated as a resident alien for tax purposes. File state taxes only More information on nonresident aliens can be found in Publication 519, U. File state taxes only S. File state taxes only Tax Guide for Aliens. File state taxes only You or anyone else claims an American opportunity or lifetime learning credit in 2013 with respect to expenses of the student for whom the qualified education expenses were paid. File state taxes only However, a state tax credit will not disqualify you from claiming a tuition and fees deduction. File state taxes only Table 19-2. File state taxes only Tuition and Fees Deduction at a Glance Do not rely on this table alone. File state taxes only Refer to the text for more details. File state taxes only Question   Answer What is the maximum benefit?   You can reduce your income subject to tax by up to $4,000. File state taxes only Where is the deduction taken?   As an adjustment to income on Form 1040, line 34, or Form 1040A, line 19. File state taxes only For whom must the expenses be paid?   A student enrolled in an eligible educational institution who is either: you, your spouse, or your dependent for whom you claim an exemption. File state taxes only What tuition and fees are deductible?   Tuition and fees required for enrollment or attendance at an eligible postsecondary educational institution, but not including personal, living, or family expenses, such as room and board. File state taxes only What Expenses Qualify The tuition and fees deduction is based on qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. File state taxes only Generally, the deduction is allowed for qualified education expenses paid in 2013 in connection with enrollment at an institution of higher education during 2013 or for an academic period (defined earlier under Student Loan Interest Deduction ) beginning in 2013 or in the first 3 months of 2014. File state taxes only Payments with borrowed funds. File state taxes only   You can claim a tuition and fees deduction for qualified education expenses paid with the proceeds of a loan. File state taxes only Use the expenses to figure the deduction for the year in which the expenses are paid, not the year in which the loan is repaid. File state taxes only Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. File state taxes only Student withdraws from class(es). File state taxes only   You can claim a tuition and fees deduction for qualified education expenses not refunded when a student withdraws. File state taxes only Qualified Education Expenses For purposes of the tuition and fees deduction, qualified education expenses are tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. File state taxes only Eligible educational institution. File state taxes only   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. File state taxes only S. File state taxes only Department of Education. File state taxes only It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. File state taxes only The educational institution should be able to tell you if it is an eligible educational institution. File state taxes only   Certain educational institutions located outside the United States also participate in the U. File state taxes only S. File state taxes only Department of Education's Federal Student Aid (FSA) programs. File state taxes only Academic period. File state taxes only    An academic period is any quarter, semester, trimester, or any other period of study as reasonably determined by an eligible educational institution. File state taxes only If an eligible educational institution uses credit hours and does not have academic terms, each payment period may be treated as an academic period. File state taxes only Related expenses. File state taxes only   Student-activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses for the tuition and fees deduction only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance. File state taxes only Prepaid expenses. File state taxes only   Qualified education expenses paid in 2013 for an academic period that begins in the first three months of 2014 can be used in figuring the tuition and fees deduction. File state taxes only See Academic period, earlier. File state taxes only For example, if you pay $2,000 in December 2013 for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring the tuition and fees deduction for 2013 only if you meet all the other requirements. File state taxes only    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 tuition and fees deduction. File state taxes only No Double Benefit Allowed You cannot do any of the following. File state taxes only Deduct qualified education expenses you deduct under any other provision of the law, for example, as a business expense. File state taxes only Deduct qualified education expenses for a student on your income tax return if you or anyone else claims an American opportunity or lifetime learning credit for that same student in the same year. File state taxes only Deduct qualified education expenses that have been used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or a qualified tuition program (QTP). File state taxes only For a QTP, this applies only to the amount of tax-free earnings that were distributed, not to the recovery of contributions to the program. File state taxes only See Figuring the Taxable Portion of a Distribution in chapter 7 (Coverdell ESA) and chapter 8 (QTP) of Publication 970. File state taxes only Deduct qualified education expenses that have been paid with tax-free interest on U. File state taxes only S. File state taxes only savings bonds (Form 8815). File state taxes only See Figuring the Tax-Free Amount in chapter 10 of Publication 970. File state taxes only Deduct qualified education expenses that have been paid with tax-free educational assistance such as a scholarship, grant, or employer-provided educational assistance. File state taxes only See Adjustments to qualified education expenses, later. File state taxes only Adjustments to qualified education expenses. File state taxes only   For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. File state taxes only The result is the amount of adjusted qualified education expenses for each student. File state taxes only Tax-free educational assistance. File state taxes only   For tax-free educational assistance you received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance to that academic period. File state taxes only See Academic period, earlier. File state taxes only   This includes: The tax-free part of scholarships and fellowships, including Pell grants (see chapter 1 of Publication 970), The tax-free part of any employer-provided educational assistance (see chapter 11 of Publication 970), Veterans' educational assistance (see chapter 1 of Publication 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. File state taxes only Generally, any scholarship or fellowship you receive is treated as tax-free educational assistance. File state taxes only However, a scholarship or fellowship is not treated as tax-free educational assistance to the extent you include it in gross income (if you are required to file a tax return) for the year the scholarship or fellowship is received and either: The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. File state taxes only 970, chapter 1. File state taxes only The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. File state taxes only 970, chapter 1. File state taxes only You may be able to increase the combined value of your tuition and fees deduction and certain educational assistance if you include some or all of the educational assistance in income in the year it is received. File state taxes only For details, see Adjustments to Qualified Education Expenses in chapter 6 of Pub. File state taxes only 970. File state taxes only Some tax-free educational assistance received in 2013 may be treated as a refund of qualified education expenses paid in 2013. File state taxes only This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2013 for qualified education expenses paid on behalf of a student in 2013 (or attributable to enrollment at an eligible educational institution during 2013). File state taxes only If this tax-free educational assistance is received after 2013 but before you file your 2013 income tax return, see Refunds received after 2013 but before your income tax return is filed, later. File state taxes only If this tax-free educational assistance is received after 2013 and after you file your 2013 income tax return, see Refunds received after 2013 and after your income tax return is filed, later. File state taxes only Refunds. File state taxes only   A refund of qualified education expenses may reduce adjusted qualified education expenses for the tax year or may require you to include some or all of the refund in your gross income for the year the refund is received. File state taxes only See chapter 6 of Pub. File state taxes only 970 for more information. File state taxes only Some tax-free educational assistance received after 2013 may be treated as a refund. File state taxes only See Tax-free educational assistance, earlier. File state taxes only Refunds received in 2013. File state taxes only    For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses paid in 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. File state taxes only Refunds received after 2013 but before your income tax return is filed. File state taxes only   If you receive a refund after 2013 of qualified education expenses you paid in 2013 and the refund is received before you file your 2013 income tax return, reduce the amount of qualified education expenses for 2013 by the amount of the refund. File state taxes only Refunds received after 2013 and after your income tax return is filed. File state taxes only   If you receive a refund after 2013 of qualified education expenses you paid in 2013 and the refund is received after you file your 2013 income tax return, you may need to include some or all of the refund in your gross income for the year the refund is received. File state taxes only See chapter 6 of Pub. File state taxes only 970 for more information. File state taxes only Coordination with Coverdell education savings accounts and qualified tuition programs. File state taxes only    Reduce your qualified education expenses by any qualified education expenses used to figure the exclusion from gross income of (a) interest received under an education savings bond program, or (b) any distribution from a Coverdell education savings account or qualified tuition program (QTP). File state taxes only For a QTP, this applies only to the amount of tax-free earnings that were distributed, not to the recovery of contributions to the program. File state taxes only Amounts that do not reduce qualified education expenses. File state taxes only   Do not reduce qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. File state taxes only   Do not reduce the qualified education expenses by any scholarship or fellowship reported as income on the student's tax return in the following situations. File state taxes only The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses. File state taxes only The use of the money is not restricted. File state taxes only Expenses That Do Not Qualify Qualified education expenses do not include amounts paid for: Insurance, Medical expenses (including student health fees), Room and board, Transportation, or Similar personal, living, or family expenses. File state taxes only This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. File state taxes only Sports, games, hobbies, and noncredit courses. File state taxes only   Qualified education expenses generally do not include expenses that relate to any course of instruction or other education that involves sports, games or hobbies, or any noncredit course. File state taxes only However, if the course of instruction or other education is part of the student's degree program, these expenses can qualify. File state taxes only Comprehensive or bundled fees. File state taxes only   Some eligible educational institutions combine all of their fees for an academic period into one amount. File state taxes only If you do not receive, or do not have access to, an allocation showing how much you paid for qualified education expenses and how much you paid for personal expenses, such as those listed above, contact the institution. File state taxes only The institution is required to make this allocation and provide you with the amount you paid (or were billed) for qualified education expenses on Form 1098-T, Tuition Statement. File state taxes only See How Do You Figure the Deduction , later, for more information about Form 1098-T. File state taxes only Who Is an Eligible Student For purposes of the tuition and fees deduction, an eligible student is a student who is enrolled in one or more courses at an eligible educational institution (defined earlier). File state taxes only Who Can Claim a Dependent's Expenses Generally, in order to claim the tuition and fees deduction for qualified education expenses for a dependent, you must: Have paid the expenses, and Claim an exemption for the student as a dependent. File state taxes only Table 19-3 summarizes who can claim the deduction. File state taxes only How Much Can You Deduct The maximum tuition and fees deduction in 2013 is $4,000, $2,000, or $0, depending on the amount of your MAGI. File state taxes only For details on figuring your MAGI, see chapter 6 of Publication 970. File state taxes only How Do You Figure the Deduction Figure the deduction using Form 8917. File state taxes only To help you figure your tuition and fees deduction, you should receive Form 1098-T, Tuition Statement. File state taxes only Generally, an eligible educational institution (such as a college or university) must send Form 1098-T (or acceptable substitute) to each enrolled student by January 31, 2014. File state taxes only To claim the deduction, enter the allowable amount on Form 1040, line 34, or Form 1040A, line 19, and attach your completed Form 8917. File state taxes only Table 19-3. File state taxes only Who Can Claim a Dependent's Expenses Do not rely on this table alone. File state taxes only See Who Can Claim a Dependent's Expenses in chapter 6 of Publication 970. File state taxes only IF your dependent is an eligible student and you. File state taxes only . File state taxes only . File state taxes only AND. File state taxes only . File state taxes only . File state taxes only THEN. File state taxes only . File state taxes only . File state taxes only claim an exemption for your dependent you paid all qualified education expenses for your dependent only you can deduct the qualified education expenses that you paid. File state taxes only Your dependent cannot take a deduction. File state taxes only claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. File state taxes only do not claim an exemption for your dependent you paid all qualified education expenses no one is allowed to take a deduction. File state taxes only do not claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. File state taxes only Educator Expenses If you were an eligible educator in 2013, you can deduct on Form 1040, line 23, or Form 1040A, line 16, up to $250 of qualified expenses you paid in 2013. File state taxes only If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. File state taxes only However, neither spouse can deduct more than $250 of his or her qualified expenses on Form 1040, line 23, or Form 1040A, line 16. File state taxes only You may be able to deduct expenses that are more than the $250 (or $500) limit on Schedule A (Form 1040), line 21. File state taxes only Eligible educator. File state taxes only   An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide who worked in a school for at least 900 hours during a school year. File state taxes only Qualified expenses. File state taxes only   Qualified expenses include ordinary and necessary expenses paid in connection with books, supplies, equipment (including computer equipment, software, and services), and other materials used in the classroom. File state taxes only An ordinary expense is one that is common and accepted in your educational field. File state taxes only A necessary expense is one that is helpful and appropriate for your profession as an educator. File state taxes only An expense does not have to be required to be considered necessary. File state taxes only   Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. File state taxes only   You must reduce your qualified expenses by the following amounts. File state taxes only Excludable U. File state taxes only S. File state taxes only series EE and I savings bond interest from Form 8815. File state taxes only See Figuring the Tax-Free Amount in chapter 10 of Publication 970. File state taxes only Nontaxable qualified tuition program earnings or distributions. File state taxes only See Figuring the Taxable Portion of a Distribution in chapter 8 of Publication 970. File state taxes only Nontaxable distribution of earnings from a Coverdell education savings account. File state taxes only See Figuring the Taxable Portion of a Distribution in chapter 7 of Publication 970. File state taxes only Any reimbursements you received for these expenses that were not reported to you in box 1 of your Form W-2. File state taxes only Prev  Up  Next   Home   More Online Publications