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Free 1040x Form

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Free 1040x Form

Free 1040x form Index Symbols 403(b) account, What Is a 403(b) Plan? 403(b) plans Basics, 403(b) Plan Basics Benefits, What Are the Benefits of Contributing to a 403(b) Plan? Participation, Who Can Participate in a 403(b) Plan? Self-employed ministers, Who Can Set Up a 403(b) Account? What is a 403(b) plan?, What Is a 403(b) Plan? Who can set up a 403(b) account?, Who Can Set Up a 403(b) Account? A After-tax contributions, How Can Contributions Be Made to My 403(b) Account? Assistance (see Tax help) B Basics, 403(b) Plan Basics Benefits, What Are the Benefits of Contributing to a 403(b) Plan? C Catch-up contributions, Catch-Up Contributions Chaplain, Ministers. Free 1040x form Church employees, Ministers and Church Employees Years of service, Changes to Years of Service Comments on publication, Comments and suggestions. Free 1040x form Contributions, How Can Contributions Be Made to My 403(b) Account? After-tax, How Can Contributions Be Made to My 403(b) Account? Catch-up, Catch-Up Contributions Elective deferrals, How Can Contributions Be Made to My 403(b) Account?, Elective deferrals only. Free 1040x form Nonelective, How Can Contributions Be Made to My 403(b) Account? Reporting, Do I Report Contributions on My Tax Return? Correcting excess contributions, What Happens If I Have Excess Contributions? Credit, for retirement savings contributions, Retirement Savings Contributions Credit (Saver's Credit) D Distributions, Distributions and Rollovers, Distributions 10-year tax option, No Special 10-Year Tax Option 90-24 transfer, Contract exchanges. Free 1040x form Deceased employees, Spouses of deceased employees. Free 1040x form Direct rollover, Direct rollovers of 403(b) plan distributions. Free 1040x form Eligible retirement plans, Eligible retirement plans. Free 1040x form Frozen deposit, Frozen deposits. Free 1040x form Gift tax, Gift Tax Minimum required, Minimum Required Distributions Qualified domestic relations order, Qualified domestic relations order. Free 1040x form Rollovers, Tax-Free Rollovers, Rollovers to and from 403(b) plans. Free 1040x form Second rollover, Second rollover. Free 1040x form Transfers, Transfer of Interest in 403(b) Contract E Elective deferrals, How Can Contributions Be Made to My 403(b) Account?, Elective deferrals only. Free 1040x form Eligible employees, Eligible employees. Free 1040x form , Church employee. Free 1040x form Employer's annual work period, Employer's annual work period. Free 1040x form Excess contributions, Excess Contributions Correcting, What Happens If I Have Excess Contributions? Determining, How Do I Know If I Have Excess Contributions? Excess amounts, Excess Annual Addition Excess deferrals, Excess Annual Addition Excess elective deferral, Excess Elective Deferral Excise tax, Excise Tax Excise tax Excess contributions, Excise Tax Reporting requirement, Reporting requirement. Free 1040x form F Free tax services, How To Get Tax Help, Free help with your tax return. Free 1040x form Full-time or part-time, Years of Service G Gift tax, Gift Tax H Help (see Tax help) I Incidental life insurance, Cost of Incidental Life Insurance Includible compensation, Includible Compensation 403(b) plan, Changes to Includible Compensation Figuring, Figuring Includible Compensation for Your Most Recent Year of Service Foreign missionaries, Changes to Includible Compensation Incidental life insurance, Cost of Incidental Life Insurance Self-employed ministers, Changes to Includible Compensation Includible compensation for your most recent year of service Definition, Definition. Free 1040x form L Limit on annual additions, Limit on Annual Additions Limit on elective deferrals, Limit on Elective Deferrals 15-year rule, 15-Year Rule Figuring, Figuring the Limit on Elective Deferrals General limit, General Limit M MAC (see Maximum amount contributable) Maximum amount contributable, Maximum Amount Contributable (MAC) Components, Components of Your MAC How to figure MAC, How Do I Figure My MAC? When to figure MAC, When Should I Figure My MAC? Minimum required distributions, Minimum Required Distributions Ministers, Ministers. Free 1040x form , Ministers and Church Employees Missing children, Reminder More information (see Tax help) Most recent year of service, Most Recent Year of Service Most recent year of service, figuring, Figuring Your Most Recent Year of Service N Nonelective contributions, How Can Contributions Be Made to My 403(b) Account?, Nonelective contributions only. Free 1040x form P Pre-tax contributions, Includible Compensation, Table 3-4. Free 1040x form Worksheet B. Free 1040x form Includible Compensation for Your Most Recent Year of Service1 , Rollovers to and from 403(b) plans. Free 1040x form , Worksheet B. Free 1040x form Includible Compensation for Your Most Recent Year of Service1 Publications (see Tax help) Q Qualified domestic relations order, Qualified domestic relations order. Free 1040x form R Reporting Contributions Self-employed ministers, Self-employed ministers. Free 1040x form Reporting contributions Chaplains, Chaplains. Free 1040x form Required distributions, Minimum Required Distributions Retirement savings contributions credit, What's New for 2013, What's New for 2014, Retirement Savings Contributions Credit (Saver's Credit) Rollovers, Distributions and Rollovers, Tax-Free Rollovers Roth contribution program, Roth contribution program. Free 1040x form S Salary reduction agreement, Limit on Elective Deferrals Self-employed ministers, Ministers. Free 1040x form , Who Can Set Up a 403(b) Account?, Self-employed minister. Free 1040x form , Self-employed ministers. Free 1040x form , Self-employed minister. Free 1040x form Suggestions for publication, Comments and suggestions. Free 1040x form T Tax help, How To Get Tax Help Transfers, Transfer of Interest in 403(b) Contract 90-24 transfer, Transfer of Interest in 403(b) Contract Conservatorship, Contract exchanges. Free 1040x form Direct-trustee-to-trustee, Direct trustee-to-trustee transfer. Free 1040x form Insolvency, Tax-free transfers for certain cash distributions. Free 1040x form Permissive service credit, Permissive service credit. Free 1040x form TTY/TDD information, How To Get Tax Help V Voluntary deductible contributions, Voluntary deductible contributions. Free 1040x form W What is a 403(b) plan?, What Is a 403(b) Plan? Y Years of service, Years of Service Church employees, Church employee. Free 1040x form , Changes to Years of Service Definition, Definition Employer's annual work period, Employer's annual work period. Free 1040x form Full year of service, Full year of service. Free 1040x form Full-time employee for the full year, Full-Time Employee for the Full Year Full-time for part of the year, Full-time for part of the year. Free 1040x form Other than full-time for the full year, Other Than Full-Time for the Full Year Part-time for the full year, Part-time for the full year. Free 1040x form Part-time for the part of the year, Part-time for part of the year. Free 1040x form Self-employed minister, Changes to Years of Service Total years of service, Total years of service. Free 1040x form Prev  Up     Home   More Online Publications
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The Free 1040x Form

Free 1040x form 4. Free 1040x form   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. Free 1040x form 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. Free 1040x form 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. Free 1040x form This deduction can reduce the amount of your income subject to tax by up to $2,500 in 2013. Free 1040x form The student loan interest deduction is taken as an adjustment to income. Free 1040x form This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). Free 1040x form 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. Free 1040x form Table 4-1. Free 1040x form Student Loan Interest Deduction at a Glance This table summarizes the features of the student loan interest deduction. Free 1040x form Do not rely on this table alone. Free 1040x form Refer to the text for complete details. Free 1040x form Feature   Description Maximum benefit   You can reduce your income subject to tax by up to $2,500. Free 1040x form 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. Free 1040x form Student qualifications   The student must be: •you, your spouse, or your dependent, and  •enrolled at least half-time in a degree program. Free 1040x form Time limit on deduction   You can deduct interest paid during the remaining period of your student loan. Free 1040x form 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). Free 1040x form Student Loan Interest Defined Student loan interest is interest you paid during the year on a qualified student loan. Free 1040x form It includes both required and voluntary interest payments. Free 1040x form 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. Free 1040x form Loans from the following sources are not qualified student loans. Free 1040x form A related person. Free 1040x form A qualified employer plan. Free 1040x form Your dependent. Free 1040x form   Generally, your dependent is someone who is either a: Qualifying child, or Qualifying relative. Free 1040x form You can find more information about dependents in Publication 501. Free 1040x form Exceptions. Free 1040x form   For purposes of the student loan interest deduction, there are the following exceptions to the general rules for dependents. Free 1040x form An individual can be your dependent even if you are the dependent of another taxpayer. Free 1040x form An individual can be your dependent even if the individual files a joint return with a spouse. Free 1040x form 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). Free 1040x form Reasonable period of time. Free 1040x form   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. Free 1040x form   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. Free 1040x form 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. Free 1040x form   If neither of the above situations applies, the reasonable period of time usually is determined based on all the relevant facts and circumstances. Free 1040x form Academic period. Free 1040x form   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. Free 1040x form 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. Free 1040x form Eligible student. Free 1040x form   This is a student who was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. Free 1040x form Enrolled at least half-time. Free 1040x form   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. Free 1040x form   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. Free 1040x form However, the standard may not be lower than any of those established by the U. Free 1040x form S. Free 1040x form Department of Education under the Higher Education Act of 1965. Free 1040x form Related person. Free 1040x form   You cannot deduct interest on a loan you get from a related person. Free 1040x form Related persons include: Your spouse, Your brothers and sisters, Your half brothers and half sisters, Your ancestors (parents, grandparents, etc. Free 1040x form ), Your lineal descendants (children, grandchildren, etc. Free 1040x form ), and Certain corporations, partnerships, trusts, and exempt organizations. Free 1040x form Qualified employer plan. Free 1040x form   You cannot deduct interest on a loan made under a qualified employer plan or under a contract purchased under such a plan. Free 1040x form 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. Free 1040x form They include amounts paid for the following items. Free 1040x form Tuition and fees. Free 1040x form Room and board. Free 1040x form Books, supplies, and equipment. Free 1040x form Other necessary expenses (such as transportation). Free 1040x form 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. Free 1040x form Eligible educational institution. Free 1040x form   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. Free 1040x form S. Free 1040x form Department of Education. Free 1040x form It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Free 1040x form   Certain educational institutions located outside the United States also participate in the U. Free 1040x form S. Free 1040x form Department of Education's Federal Student Aid (FSA) programs. Free 1040x form   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. Free 1040x form   An educational institution must meet the above criteria only during the academic period(s) for which the student loan was incurred. Free 1040x form The deductibility of interest on the loan is not affected by the institution's subsequent loss of eligibility. Free 1040x form    The educational institution should be able to tell you if it is an eligible educational institution. Free 1040x form 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. Free 1040x form Employer-provided educational assistance. Free 1040x form See chapter 11, Employer-Provided Educational Assistance . Free 1040x form Tax-free distribution of earnings from a Coverdell education savings account (ESA). Free 1040x form See Tax-Free Distributions in chapter 7, Coverdell Education Savings Account. Free 1040x form Tax-free distribution of earnings from a qualified tuition program (QTP). Free 1040x form See Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program. Free 1040x form U. Free 1040x form S. Free 1040x form savings bond interest that you exclude from income because it is used to pay qualified education expenses. Free 1040x form See chapter 10, Education Savings Bond Program . Free 1040x form The tax-free part of scholarships and fellowships. Free 1040x form See Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Free 1040x form Veterans' educational assistance. Free 1040x form See Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Free 1040x form Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Free 1040x form 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. Free 1040x form Loan origination fee. Free 1040x form   In general, this is a one-time fee charged by the lender when a loan is made. Free 1040x form 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. Free 1040x form A loan origination fee treated as interest accrues over the term of the loan. Free 1040x form   Loan origination fees were not required to be reported on Form 1098-E, Student Loan Interest Statement, for loans made before September 1, 2004. Free 1040x form 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. Free 1040x form 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. Free 1040x form A method that results in the double deduction of the same portion of a loan origination fee would not be reasonable. Free 1040x form Example. Free 1040x form In August 2004, Bill took out a student loan for $16,000 to pay the tuition for his senior year of college. Free 1040x form The lender charged a 3% loan origination fee ($480) that was withheld from the funds Bill received. Free 1040x form Bill began making payments on his student loan in 2013. Free 1040x form 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. Free 1040x form Bill's loan is payable in 120 equal monthly payments. Free 1040x form He allocates the $480 fee equally over the total number of payments ($480 ÷ 120 months = $4 per month). Free 1040x form Bill made 7 payments in 2013, so he paid $28 ($4 × 7) of interest attributable to the loan origination fee. Free 1040x form 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. Free 1040x form Capitalized interest. Free 1040x form   This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. Free 1040x form Capitalized interest is treated as interest for tax purposes and is deductible as payments of principal are made on the loan. Free 1040x form No deduction for capitalized interest is allowed in a year in which no loan payments were made. Free 1040x form Interest on revolving lines of credit. Free 1040x form   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. Free 1040x form See Qualified Education Expenses , earlier. Free 1040x form Interest on refinanced student loans. Free 1040x form   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. Free 1040x form    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. Free 1040x form Voluntary interest payments. Free 1040x form   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. Free 1040x form Example. Free 1040x form The payments on Roger's student loan were scheduled to begin in June 2012, 6 months after he graduated from college. Free 1040x form He began making payments as required. Free 1040x form In September 2013, Roger enrolled in graduate school on a full-time basis. Free 1040x form He applied for and was granted deferment of his loan payments while in graduate school. Free 1040x form Wanting to pay down his student loan as much as possible, he made loan payments in October and November 2013. Free 1040x form Even though these were voluntary (not required) payments, Roger can deduct the interest paid in October and November. Free 1040x form 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. Free 1040x form 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. Free 1040x form Example. Free 1040x form In August 2012, Peg took out a $10,000 student loan to pay the tuition for her senior year of college. Free 1040x form The lender charged a 3% loan origination fee ($300) that was withheld from the funds Peg received. Free 1040x form The interest (5% simple) on this loan accrued while she completed her senior year and for 6 months after she graduated. Free 1040x form 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. Free 1040x form The loan is payable over 60 months, with a payment of $200. Free 1040x form 51 due on the first of each month, beginning November 2013. Free 1040x form 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. Free 1040x form 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). Free 1040x form Payment Date   Payment   Stated Interest   Principal November 2013   $200. Free 1040x form 51   $44. Free 1040x form 27   $156. Free 1040x form 24 December 2013   $200. Free 1040x form 51   $43. Free 1040x form 62   $156. Free 1040x form 89 Totals   $401. Free 1040x form 02   $87. Free 1040x form 89   $313. Free 1040x form 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. Free 1040x form 89. Free 1040x form Next, she allocates the loan origination fee over the term of the loan ($300 ÷ 60 months = $5 per month). Free 1040x form A total of $10 ($5 of each of the two principal payments) should be treated as interest for tax purposes. Free 1040x form 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. Free 1040x form Assuming that Peg qualifies to take the student loan interest deduction, she can deduct $401. Free 1040x form 02 ($87. Free 1040x form 89 + $10 + $303. Free 1040x form 13). Free 1040x form 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. Free 1040x form She also will apply the remaining amount of capitalized interest ($625 − $303. Free 1040x form 13 = $321. Free 1040x form 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. Free 1040x form Do Not Include As Interest You cannot claim a student loan interest deduction for any of the following items. Free 1040x form Interest you paid on a loan if, under the terms of the loan, you are not legally obligated to make interest payments. Free 1040x form Loan origination fees that are payments for property or services provided by the lender, such as commitment fees or processing costs. Free 1040x form 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. Free 1040x form For more information, see Student Loan Repayment Assistance in chapter 5, Student Loan Cancellations and Repayment Assistance. Free 1040x form 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. Free 1040x form Can You Claim the Deduction Generally, you can claim the deduction if all of the following requirements are met. Free 1040x form Your filing status is any filing status except married filing separately. Free 1040x form No one else is claiming an exemption for you on his or her tax return. Free 1040x form You are legally obligated to pay interest on a qualified student loan. Free 1040x form You paid interest on a qualified student loan. Free 1040x form Claiming an exemption for you. Free 1040x form   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. Free 1040x form Example 1. Free 1040x form During 2013, Josh paid $600 interest on his qualified student loan. Free 1040x form Only he is legally obligated to make the payments. Free 1040x form No one claimed an exemption for Josh for 2013. Free 1040x form Assuming all other requirements are met, Josh can deduct the $600 of interest he paid on his 2013 Form 1040 or 1040A. Free 1040x form Example 2. Free 1040x form During 2013, Jo paid $1,100 interest on her qualified student loan. Free 1040x form Only she is legally obligated to make the payments. Free 1040x form Jo's parents claimed an exemption for her on their 2013 tax return. Free 1040x form In this case, neither Jo nor her parents may deduct the student loan interest Jo paid in 2013. Free 1040x form Interest paid by others. Free 1040x form   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. Free 1040x form Example 1. Free 1040x form Darla obtained a qualified student loan to attend college. Free 1040x form After Darla's graduation from college, she worked as an intern for a nonprofit organization. Free 1040x form As part of the internship program, the nonprofit organization made an interest payment on behalf of Darla. Free 1040x form This payment was treated as additional compensation and reported in box 1 of her Form W-2. Free 1040x form Assuming all other qualifications are met, Darla can deduct this payment of interest on her tax return. Free 1040x form Example 2. Free 1040x form Ethan obtained a qualified student loan to attend college. Free 1040x form After graduating from college, the first monthly payment on his loan was due in December. Free 1040x form As a gift, Ethan's mother made this payment for him. Free 1040x form No one is claiming a dependency exemption for Ethan on his or her tax return. Free 1040x form Assuming all other qualifications are met, Ethan can deduct this payment of interest on his tax return. Free 1040x form 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). Free 1040x form Figuring the Deduction Your student loan interest deduction for 2013 is generally the smaller of: $2,500, or The interest you paid in 2013. Free 1040x form However, the amount determined above may be gradually reduced (phased out) or eliminated based on your filing status and MAGI as explained below. Free 1040x form You can use Worksheet 4-1. Free 1040x form Student Loan Interest Deduction Worksheet (at the end of this chapter) to figure both your MAGI and your deduction. Free 1040x form Form 1098-E. Free 1040x form   To help you figure your student loan interest deduction, you should receive Form 1098-E. Free 1040x form 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. Free 1040x form   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. Free 1040x form Other interest payments, such as certain loan origination fees and capitalized interest, may not appear on the form you receive. Free 1040x form However, if you pay qualifying interest that is not included on Form 1098-E, you can also deduct those amounts. Free 1040x form See Allocating Payments Between Interest and Principal , earlier. Free 1040x form    The lender may ask for a completed Form W-9S, or similar statement to obtain the borrower's name, address, and taxpayer identification number. Free 1040x form The form may also be used by the borrower to certify that the student loan was incurred solely to pay for qualified education expenses. Free 1040x form 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). Free 1040x form 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). Free 1040x form Modified adjusted gross income (MAGI). Free 1040x form   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. Free 1040x form However, as discussed below, there may be other modifications. Free 1040x form Table 4-2 shows how the amount of your MAGI can affect your student loan interest deduction. Free 1040x form Table 4-2. Free 1040x form Effect of MAGI on Student Loan Interest Deduction IF your filing status is. Free 1040x form . Free 1040x form . Free 1040x form AND your MAGI is. Free 1040x form . Free 1040x form . Free 1040x form THEN your student loan interest deduction is. Free 1040x form . Free 1040x form . Free 1040x form single,  head of household, or qualifying widow(er) not more than $60,000 not affected by the phaseout. Free 1040x form more than $60,000  but less than $75,000 reduced because of the phaseout. Free 1040x form $75,000 or more eliminated by the phaseout. Free 1040x form married filing joint return not more than $125,000 not affected by the phaseout. Free 1040x form more than $125,000 but less than $155,000 reduced because of the phaseout. Free 1040x form $155,000 or more eliminated by the phaseout. Free 1040x form MAGI when using Form 1040A. Free 1040x form   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). Free 1040x form MAGI when using Form 1040. Free 1040x form   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. Free 1040x form MAGI when using Form 1040NR. Free 1040x form   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). Free 1040x form MAGI when using Form 1040NR-EZ. Free 1040x form   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). Free 1040x form Phaseout. Free 1040x form   If your MAGI is within the range of incomes where the credit must be reduced, you must figure your reduced deduction. Free 1040x form To figure the phaseout, multiply your interest deduction (before the phaseout) by a fraction. Free 1040x form The numerator is your MAGI minus $60,000 ($125,000 in the case of a joint return). Free 1040x form The denominator is $15,000 ($30,000 in the case of a joint return). Free 1040x form Subtract the result from your deduction (before the phaseout) to give you the amount you can deduct. Free 1040x form Example 1. Free 1040x form During 2013 you paid $800 interest on a qualified student loan. Free 1040x form Your 2013 MAGI is $145,000 and you are filing a joint return. Free 1040x form You must reduce your deduction by $533, figured as follows. Free 1040x form   $800 × $145,000 − $125,000  $30,000 = $533   Your reduced student loan interest deduction is $267 ($800 − $533). Free 1040x form Example 2. Free 1040x form The facts are the same as in Example 1 except that you paid $2,750 interest. Free 1040x form Your maximum deduction for 2013 is $2,500. Free 1040x form You must reduce your maximum deduction by $1,667, figured as follows. Free 1040x form   $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). Free 1040x form 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. Free 1040x form 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. Free 1040x form Student Loan Interest Deduction Worksheet at the end of this chapter. Free 1040x form Claiming the Deduction The student loan interest deduction is an adjustment to income. Free 1040x form 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). Free 1040x form Worksheet 4-1. Free 1040x form 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. Free 1040x form 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. Free 1040x form 1. Free 1040x form Enter the total interest you paid in 2013 on qualified student loans. Free 1040x form Do not enter  more than $2,500 1. Free 1040x form   2. Free 1040x form Enter the amount from Form 1040, line 22 2. Free 1040x form       3. Free 1040x form Enter the total of the amounts from Form 1040,  lines 23 through 32 3. Free 1040x form           4. Free 1040x form Enter the total of any amounts entered on the dotted line next to Form 1040, line 36 4. Free 1040x form           5. Free 1040x form Add lines 3 and 4 5. Free 1040x form       6. Free 1040x form Subtract line 5 from line 2 6. Free 1040x form       7. Free 1040x form Enter any foreign earned income exclusion and/or housing  exclusion (Form 2555, line 45, or Form 2555-EZ, line 18) 7. Free 1040x form       8. Free 1040x form Enter any foreign housing deduction (Form 2555, line 50) 8. Free 1040x form       9. Free 1040x form Enter the amount of income from Puerto Rico you are excluding 9. Free 1040x form       10. Free 1040x form Enter the amount of income from American Samoa  you are excluding (Form 4563, line 15) 10. Free 1040x form       11. Free 1040x form Add lines 6 through 10. Free 1040x form This is your modified adjusted gross income 11. Free 1040x form   12. Free 1040x form Enter the amount shown below for your filing status 12. Free 1040x form     •Single, head of household, or qualifying widow(er)—$60,000       •Married filing jointly—$125,000     13. Free 1040x form Is the amount on line 11 more than the amount on line 12?       □ No. Free 1040x form Skip lines 13 and 14, enter -0- on line 15, and go to line 16. Free 1040x form       □ Yes. Free 1040x form Subtract line 12 from line 11 13. Free 1040x form   14. Free 1040x form Divide line 13 by $15,000 ($30,000 if married filing jointly). Free 1040x form Enter the result as a decimal  (rounded to at least three places). Free 1040x form If the result is 1. Free 1040x form 000 or more, enter 1. Free 1040x form 000 14. Free 1040x form . Free 1040x form 15. Free 1040x form Multiply line 1 by line 14 15. Free 1040x form   16. Free 1040x form Student loan interest deduction. Free 1040x form Subtract line 15 from line 1. Free 1040x form Enter the result here  and on Form 1040, line 33. Free 1040x form Do not include this amount in figuring any other  deduction on your return (such as on Schedule A, C, E, etc. Free 1040x form ) 16. Free 1040x form   Prev  Up  Next   Home   More Online Publications