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Free State Filing Income Tax

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Free State Filing Income Tax

Free state filing income tax Publication 570 - Introductory Material Table of Contents Future developments. Free state filing income tax What's New Reminders IntroductionOrdering forms and publications. Free state filing income tax Tax questions. Free state filing income tax Useful Items - You may want to see: Future developments. Free state filing income tax For information about any additional changes to the 2013 tax law affecting Pub. Free state filing income tax 570, please go to www. Free state filing income tax irs. Free state filing income tax gov/pub570. Free state filing income tax What's New Maximum income subject to social security tax. Free state filing income tax . Free state filing income tax  For 2013, the maximum amount of self-employment income subject to social security is $113,700. Free state filing income tax Optional methods to figure net earnings. Free state filing income tax . Free state filing income tax  For 2013, the maximum income for using the optional methods is $4,640. Free state filing income tax Additional Medicare Tax. Free state filing income tax  Beginning in 2013, you may be required to pay Additional Medicare Tax. Free state filing income tax Also, you may need to report Additional Medicare Tax withheld by your employer. Free state filing income tax For more information, see Additional Medicare Tax under Special Rules for Completing Your U. Free state filing income tax S. Free state filing income tax Tax Return in chapter 4. Free state filing income tax Net Investment Income Tax. Free state filing income tax  Beginning in 2013, the Net Investment Income Tax (NIIT) imposes a 3. Free state filing income tax 8% tax on the lesser of an individual's net investment income or the excess of the individual's modified adjusted gross income over a specified threshold amount. Free state filing income tax Bona fide residents of Puerto Rico and American Samoa who have a federal income tax return filing obligation may be liable for the NIIT if the taxpayer's modified adjusted gross income from non-territory sources exceeds a specified threshold amount. Free state filing income tax Also, bona fide residents must take into account any additional tax liability associated with the NIIT when calculating their estimated tax payments. Free state filing income tax The NIIT does not apply to any individual who is a nonresident alien with respect to the United States. Free state filing income tax For more information, see Net Investment Income Tax under Bona Fide Resident of American Samoa and Bona Fide Resident of Puerto Rico in chapter 3. Free state filing income tax Reminders Individual taxpayer identification numbers (ITINs) for aliens. Free state filing income tax  If you are a nonresident or resident alien and you do not have and are not eligible to get a social security number (SSN), you must apply for an ITIN. Free state filing income tax For details on how to do so, see Form W-7, Application for IRS Individual Taxpayer Identification Number, and its instructions. Free state filing income tax Allow 6 weeks for the IRS to notify you of your ITIN (8-10 weeks if submitted during peak processing periods (January 15 through April 30) or if you are filing from overseas). Free state filing income tax If you already have an ITIN, enter it wherever your SSN is requested on your tax return. Free state filing income tax Effective January 1, 2013, the IRS implemented new procedures that affect the Individual Taxpayer Identification Number (ITIN) application process. Free state filing income tax The documentation requirements for individuals seeking an ITIN, have been superseded by these changes. Free state filing income tax Authorized representatives are required to complete forensic training and submit the certificate of completion to the IRS no later than January 31, 2014. Free state filing income tax Taxpayers and their representatives should review these program changes, which are further explained in the Frequently Asked Questions at www. Free state filing income tax irs. Free state filing income tax gov/Individuals/Individual-Taxpayer-Identification-Number-(ITIN), before requesting an ITIN. Free state filing income tax An ITIN is for tax use only. Free state filing income tax It does not entitle you to social security benefits or change your employment or immigration status under U. Free state filing income tax S. Free state filing income tax law. Free state filing income tax Electronic filing. Free state filing income tax . Free state filing income tax  You can e-file Form 1040-SS. Free state filing income tax For general information about  electronic filing, visit www. Free state filing income tax irs. Free state filing income tax gov/efile. Free state filing income tax Earned income credit (EIC). Free state filing income tax  Generally, if you are a bona fide resident of a U. Free state filing income tax S. Free state filing income tax possession, you cannot claim the EIC on your U. Free state filing income tax S. Free state filing income tax tax return. Free state filing income tax However, certain U. Free state filing income tax S. Free state filing income tax possessions may allow bona fide residents to claim the EIC on their possession tax return. Free state filing income tax To claim the EIC on your U. Free state filing income tax S. Free state filing income tax tax return, your home (and your spouse's if filing a joint return) must have been in the United States for more than half the year. Free state filing income tax If you have a child, the child must have lived with you in the United States for more than half the year. Free state filing income tax For this purpose, the United States includes only the 50 states and the District of Columbia. Free state filing income tax Special rules apply to military personnel stationed outside the United States. Free state filing income tax For more information on this credit, see Publication 596, Earned Income Credit. Free state filing income tax Form 8938, Statement of Specified Foreign Financial Assets. Free state filing income tax  If you have specified foreign financial assets in foreign jurisdictions valued above certain threshold dollar amounts, you may have to file Form 8938, Statement of Specified Foreign Financial Assets, when you file your U. Free state filing income tax S. Free state filing income tax income tax return with the IRS. Free state filing income tax If you are required to file Form 8938, you do not have to report certain specified foreign financial assets on Form 8938. Free state filing income tax See Bona fide resident of a U. Free state filing income tax S. Free state filing income tax possession, in the Instructions for Form 8938 for more details. Free state filing income tax For additional details, go to the page for the Foreign Account Tax Compliance Act (FATCA) at www. Free state filing income tax irs. Free state filing income tax gov/businesses/corporations/article/0,,id=236667,00. Free state filing income tax html. Free state filing income tax If you do not have to file a federal income tax return with the United States, you are not required to file a Form 8938 with the IRS. Free state filing income tax Change of address. Free state filing income tax  If you change your mailing address, use Form 8822, Change of Address, to notify the Internal Revenue Service and U. Free state filing income tax S. Free state filing income tax possession tax administration, if appropriate. Free state filing income tax Mail Form 8822 to the Internal Revenue Service Center or U. Free state filing income tax S. Free state filing income tax possession tax administration for your old address (addresses for the Service Centers are on the back of the form). Free state filing income tax If you change your address before filing your tax return, write the new address in the appropriate boxes of your tax return when you file. Free state filing income tax Photographs of missing children. Free state filing income tax  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Free state filing income tax Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Free state filing income tax 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. Free state filing income tax Introduction This publication discusses how to treat income received from the following U. Free state filing income tax S. Free state filing income tax possessions on your tax return(s). Free state filing income tax American Samoa. Free state filing income tax The Commonwealth of Puerto Rico (Puerto Rico). Free state filing income tax The Commonwealth of the Northern Mariana Islands (CNMI). Free state filing income tax Guam. Free state filing income tax The U. Free state filing income tax S. Free state filing income tax Virgin Islands (USVI). Free state filing income tax Unless stated otherwise, when the term “possession” is used in this publication, it includes the Commonwealths of Puerto Rico and the Northern Mariana Islands. Free state filing income tax Chapter 1 discusses the requirements for being considered a bona fide resident of the listed possessions. Free state filing income tax Chapter 2 gives the rules for determining if your income is from sources within, or effectively connected with a trade or business in, those possessions. Free state filing income tax Next, chapter 3 looks at the rules for filing tax returns when you receive income from any of these possessions. Free state filing income tax You may have to file a U. Free state filing income tax S. Free state filing income tax tax return only, a possession tax return only, or both returns. Free state filing income tax This generally depends on whether you are a bona fide resident of the possession. Free state filing income tax In some cases, you may have to file a U. Free state filing income tax S. Free state filing income tax return, but will be able to exclude income earned in a possession from U. Free state filing income tax S. Free state filing income tax tax. Free state filing income tax You can find illustrated examples of some of the additional forms required in chapter 5. Free state filing income tax If you are not a bona fide resident of one of the possessions listed earlier, or are otherwise required to file a U. Free state filing income tax S. Free state filing income tax income tax return, the information in chapter 4 will tell you how to file your U. Free state filing income tax S. Free state filing income tax tax return. Free state filing income tax This information also applies if you have income from U. Free state filing income tax S. Free state filing income tax insular areas other than the five possessions listed earlier because that income will not qualify for any of the exclusions or other benefits discussed in chapter 3. Free state filing income tax These other U. Free state filing income tax S. Free state filing income tax insular areas include: Baker Island, Howland Island, Jarvis Island, Johnston Island, Kingman Reef, Midway Islands, Palmyra Atoll, and Wake Island. Free state filing income tax If you need information on U. Free state filing income tax S. Free state filing income tax taxation, write to: Internal Revenue Service Philadelphia, PA 19255-0725 If you need additional information on your tax obligations in a U. Free state filing income tax S. Free state filing income tax possession, write to the tax department of that possession. Free state filing income tax Their addresses are provided in chapter 3 under the individual headings for each possession. Free state filing income tax Comments and suggestions. Free state filing income tax   We welcome your comments about this publication and your suggestions for future editions. Free state filing income tax   You can send us comments from www. Free state filing income tax irs. Free state filing income tax gov/formspubs/. Free state filing income tax Click on “More Information”and then on “Comment on Tax Forms and Publications. Free state filing income tax ” Or you can write to us at the following address: Internal Revenue Service Tax Forms and Publications SE:W:CAR:MP:TFP 1111 Constitution Ave. Free state filing income tax NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Free state filing income tax Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Free state filing income tax   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. Free state filing income tax Ordering forms and publications. Free state filing income tax   Visit www. Free state filing income tax irs. Free state filing income tax 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. Free state filing income tax Internal Revenue Service 1201 N. Free state filing income tax Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Free state filing income tax   If you have a tax question, check the information available on IRS. Free state filing income tax gov or call 1-800-829-1040. Free state filing income tax We cannot answer tax questions sent to either of the above addresses. Free state filing income tax You can get the necessary possession tax forms at the tax office for the appropriate possession. Free state filing income tax The office addresses are given in chapter 3. Free state filing income tax Useful Items - You may want to see: Publication 54 Tax Guide for U. Free state filing income tax S. Free state filing income tax Citizens and Resident Aliens Abroad 514 Foreign Tax Credit for Individuals 519 U. Free state filing income tax S. Free state filing income tax Tax Guide for Aliens Form (and Instructions) 1040-PR Planilla para la Declaración de la Contribución Federal sobre el Trabajo por Cuenta Propia (Incluyendo el Crédito Tributario Adicional por Hijos para Residentes Bona Fide de Puerto Rico) 1040-SS U. Free state filing income tax S. Free state filing income tax Self-Employment Tax Return (Including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico) 1116 Foreign Tax Credit 4563 Exclusion of Income for Bona Fide Residents of American Samoa 4868 Application for Automatic Extension of Time To File U. Free state filing income tax S. Free state filing income tax Individual Income Tax Return 5074 Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands (CNMI) 8689 Allocation of Individual Income Tax to the U. Free state filing income tax S. Free state filing income tax Virgin Islands 8898 Statement for Individuals Who Begin or End Bona Fide Residence In a U. Free state filing income tax S. Free state filing income tax Possession 8959 Additional Medicare Tax 8960 Net Investment Income Tax—Individuals, Estates, and Trusts Prev  Up  Next   Home   More Online Publications
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Understanding Your CP53B Notice

We tried to direct deposit your refund, but the financial institution couldn’t process it. We are researching your account, but it will take 8 to 10 weeks to complete our review and verify this refund.


What you need to do

  • You don’t need to do anything at this time.

You may want to

  • Call us at the toll-free number on the notice if you don’t receive your refund check or a follow-up letter within 10 weeks
  • Monitor your financial accounts

If you notice any suspicious or unusual activity, you should:

  • Notify your financial institutions
  • Contact the fraud department of one of the three major credit bureaus
  • Report any fraudulent activity to your local police or sheriff's department
  • File a complaint with the Federal Trade Commission
  • Submit a Form 14039, Identity Theft Affidavit

Answers to Common Questions

Q. What should I do if I didn’t file a return?

A. Submit a Form 14039, Identity Theft Affidavit, to the IRS address in the Form 14039 instructions.

Q. Can I direct part of my refund into my tax professional’s checking or savings account to pay my tax preparation fee?

A. No. You can direct your refund to any of your checking or savings accounts. You can’t direct your refund to someone else’s account (except for your spouse’s account when you have a joint refund).

Q. Why will it take up to 10 weeks to receive my refund?

A. We must research your account to determine if you are entitled to the refund. We try to balance customer service and tax compliance when we review tax returns.  Refund timeframes are also affected by:

  • Bankruptcy
  • An open audit
  • A balance due on a related account (such as a different tax year)

Q. Will calling the IRS give me additional information or speed my refund?

A. No, calling us won’t speed up your refund. You don’t need to call us unless we send you a letter that asks you to contact us. Our telephone assistors won’t be able to provide any additional information.


Tips for next year

If you request a direct deposit refund, be sure the account you specify is in your name (or your spouse’s if you have a joint refund).

If you changed your name as a result of a recent marriage or divorce, be sure the name on your tax return matches the name registered with the Social Security Administration.

Never direct your refund to an account that belongs to a relative, friend, or tax return preparer.

 

Page Last Reviewed or Updated: 21-Jan-2014

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Free State Filing Income Tax

Free state filing income tax 6. Free state filing income tax   Tuition and Fees Deduction Table of Contents IntroductionWhat is the tax benefit of the tuition and fees deduction. Free state filing income tax Can You Claim the DeductionWho Can Claim the Deduction Who Cannot Claim the Deduction What Expenses QualifyQualified Education Expenses No Double Benefit Allowed Expenses That Do Not Qualify Who Is an Eligible Student Who Can Claim a Dependent's Expenses Figuring the DeductionEffect of the Amount of Your Income on the Amount of Your Deduction Claiming the Deduction Illustrated Example Introduction You may be able to deduct qualified education expenses paid during the year for yourself, your spouse, or your dependent(s). Free state filing income tax 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. Free state filing income tax The qualified expenses must be for higher education, as explained later under Qualified Education Expenses . Free state filing income tax What is the tax benefit of the tuition and fees deduction. Free state filing income tax   The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. Free state filing income tax   This deduction is taken as an adjustment to income. Free state filing income tax This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). Free state filing income tax This deduction may be beneficial to you if you do not qualify for the American opportunity or lifetime learning credits. Free state filing income tax You can choose the education benefit that will give you the lowest tax. Free state filing income tax You may want to compare the tuition and fees deduction to the education credits. Free state filing income tax See chapter 2, American Opportunity Credit and chapter 3, Lifetime Learning Credit for more information on the education credits. Free state filing income tax Table 6-1. Free state filing income tax Tuition and Fees Deduction at a Glance summarizes the features of the tuition and fees deduction. Free state filing income tax Can You Claim the Deduction The following rules will help you determine if you can claim the tuition and fees deduction. Free state filing income tax Who Can Claim the Deduction Generally, you can claim the tuition and fees deduction if all three of the following requirements are met. Free state filing income tax You pay qualified education expenses of higher education. Free state filing income tax You pay the education expenses for an eligible student. Free state filing income tax The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption on your tax return. Free state filing income tax The term “qualified education expenses” is defined later under Qualified Education Expenses . Free state filing income tax “Eligible student” is defined later under Who Is an Eligible Student . Free state filing income tax For more information on claiming the deduction for a dependent, see Who Can Claim a Dependent's Expenses , later. Free state filing income tax Table 6-1. Free state filing income tax Tuition and Fees Deduction at a Glance Do not rely on this table alone. Free state filing income tax Refer to the text for complete details. Free state filing income tax Question Answer What is the maximum benefit? You can reduce your income subject to tax by up to $4,000. Free state filing income tax What is the limit on modified adjusted gross income (MAGI)? $160,000 if married filing a joint return; $80,000 if single, head of household, or qualifying widow(er). Free state filing income tax Where is the deduction taken? As an adjustment to income on  Form 1040 or Form 1040A. Free state filing income tax 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. Free state filing income tax 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. Free state filing income tax Who Cannot Claim the Deduction You cannot claim the tuition and fees deduction if any of the following apply. Free state filing income tax Your filing status is married filing separately. Free state filing income tax Another person can claim an exemption for you as a dependent on his or her tax return. Free state filing income tax You cannot take the deduction even if the other person does not actually claim that exemption. Free state filing income tax Your modified adjusted gross income (MAGI) is more than $80,000 ($160,000 if filing a joint return). Free state filing income tax 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. Free state filing income tax More information on nonresident aliens can be found in Publication 519. Free state filing income tax 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. Free state filing income tax 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 beginning in 2013 or in the first 3 months of 2014. Free state filing income tax For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning in January 2014, you may be able to use that $1,500 in figuring your 2013 deduction. Free state filing income tax Academic period. Free state filing income tax   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 state filing income tax 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 state filing income tax Paid with borrowed funds. Free state filing income tax   You can claim a tuition and fees deduction for qualified education expenses paid with the proceeds of a loan. Free state filing income tax 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. Free state filing income tax Treat loan disbursements sent directly to the educational institution as paid on the date the institution credits the student's account. Free state filing income tax Student withdraws from class(es). Free state filing income tax   You can claim a tuition and fees deduction for qualified education expenses not refunded when a student withdraws. Free state filing income tax 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. Free state filing income tax Eligible educational institution. Free state filing income tax   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 state filing income tax S. Free state filing income tax Department of Education. Free state filing income tax It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Free state filing income tax The educational institution should be able to tell you if it is an eligible educational institution. Free state filing income tax   Certain educational institutions located outside the United States also participate in the U. Free state filing income tax S. Free state filing income tax Department of Education's Federal Student Aid (FSA) programs. Free state filing income tax Related expenses. Free state filing income tax   Student-activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance. Free state filing income tax Prepaid expenses. Free state filing income tax   Qualified education expenses paid in 2013 for an academic period that begins in the first three months of 2014 can be used in figuring an education credit for 2013 only. Free state filing income tax See Academic period , earlier. Free state filing income tax For example, 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 an education credit for 2013 only (if you meet all the other requirements). Free state filing income tax You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). Free state filing income tax In the following examples, assume that each student is an eligible student and each college or university an eligible educational institution. Free state filing income tax Example 1. Free state filing income tax Jackson is a sophomore in University V's degree program in dentistry. Free state filing income tax This year, in addition to tuition, he is required to pay a fee to the university for the rental of the dental equipment he will use in this program. Free state filing income tax Because the equipment rental fee must be paid to University V for enrollment and attendance, Jackson's equipment rental fee is a qualified education expense. Free state filing income tax Example 2. Free state filing income tax Donna and Charles, both first-year students at College W, are required to have certain books and other reading materials to use in their mandatory first-year classes. Free state filing income tax The college has no policy about how students should obtain these materials, but any student who purchases them from College W's bookstore will receive a bill directly from the college. Free state filing income tax Charles bought his books from a friend, so what he paid for them is not a qualified education expense. Free state filing income tax Donna bought hers at College W's bookstore. Free state filing income tax Although Donna paid College W directly for her first-year books and materials, her payment is not a qualified education expense because the books and materials are not required to be purchased from College W for enrollment or attendance at the institution. Free state filing income tax Example 3. Free state filing income tax When Marci enrolled at College X for her freshman year, she had to pay a separate student activity fee in addition to her tuition. Free state filing income tax This activity fee is required of all students, and is used solely to fund on-campus organizations and activities run by students, such as the student newspaper and the student government. Free state filing income tax No portion of the fee covers personal expenses. Free state filing income tax Although labeled as a student activity fee, the fee is required for Marci's enrollment and attendance at College X. Free state filing income tax Therefore, it is a qualified expense. Free state filing income tax No Double Benefit Allowed You cannot do any of the following. Free state filing income tax Deduct qualified education expenses you deduct under any other provision of the law, for example, as a business expense. Free state filing income tax 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. Free state filing income tax 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). Free state filing income tax 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. Free state filing income tax See Coordination With Tuition and Fees Deduction in chapter 8, Qualified Tuition Program, later. Free state filing income tax Deduct qualified education expenses that have been paid with tax-free interest on U. Free state filing income tax S. Free state filing income tax savings bonds (Form 8815). Free state filing income tax See Figuring the Tax-Free Amount in chapter 10, Education Savings Bond Program, later. Free state filing income tax Deduct qualified education expenses that have been paid with tax-free educational assistance, such as a scholarship, grant, or assistance provided by an employer. Free state filing income tax See the following section on Adjustments to Qualified Education Expenses. Free state filing income tax Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. Free state filing income tax The result is the amount of adjusted qualified education expenses for each student. Free state filing income tax You must also reduce qualified education expenses by the other amounts referred to in No Double Benefit Allowed , earlier. Free state filing income tax Tax-free educational assistance. Free state filing income tax   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. Free state filing income tax See Academic period , earlier. Free state filing income tax   Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. Free state filing income tax 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). Free state filing income tax   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. Free state filing income tax 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. Free state filing income tax   This tax-free education assistance includes: The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Free state filing income tax Generally, any scholarship or fellowship is treated as tax free. Free state filing income tax However, a scholarship or fellowship is not treated as tax free to the extent the student includes it in gross income (if the student is required to file a tax return for the year the scholarship or fellowship is received) and either of the following is true. Free state filing income tax 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 chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Free state filing income tax 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 chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Free state filing income tax You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year it is received. Free state filing income tax For details, see Adjustments to Qualified Education Expenses in chapters 2 and 3. Free state filing income tax Refunds. Free state filing income tax   A refund of qualified education expenses may reduce adjusted qualified education expenses for the tax year or require repayment (recapture) of a credit claimed in an earlier year. Free state filing income tax Some tax-free educational assistance received after 2013 may be treated as a refund. Free state filing income tax See Tax-free educational assistance , earlier. Free state filing income tax Refunds received in 2013. Free state filing income tax   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses for 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. Free state filing income tax Refunds received after 2013 but before your income tax return is filed. Free state filing income tax   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid before you file an income tax return for 2013, the amount of qualified education expenses for 2013 is reduced by the amount of the refund. Free state filing income tax Refunds received after 2013 and after your income tax return is filed. Free state filing income tax   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid after you file an income tax return for 2013, you may need to repay some or all of the credit. Free state filing income tax See Credit recapture , later. Free state filing income tax Coordination with Coverdell education savings accounts and qualified tuition programs. Free state filing income tax   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). Free state filing income tax 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. Free state filing income tax Credit recapture. Free state filing income tax    If any tax-free educational assistance for the qualified education expenses paid in 2013 or any refund of your qualified education expenses paid in 2013 is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. Free state filing income tax You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing that amount by the amount of the refund or tax-free educational assistance. Free state filing income tax You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you had claimed the refigured credit(s). Free state filing income tax Include that amount as an additional tax for the year the refund or tax-free assistance was received. Free state filing income tax Example. Free state filing income tax   You paid $3,500 of qualified education expenses in December 2013, and your child began college in January 2014. Free state filing income tax You claimed $3,500 as the tuition and fees deduction on your 2013 income tax return. Free state filing income tax The reduction reduced your taxable income by $3,500. Free state filing income tax Also, you claimed no tax credits in 2013. Free state filing income tax Your child withdrew from two classes and you received a refund of $2,000 in 2014 after you filed your 2013 tax return. Free state filing income tax Refigure your 2013 tuition and fees deduction using $1,500 of qualified education expense instead of the $3,500. Free state filing income tax The refigured tuition and fees deduction is $1,500. Free state filing income tax Do not file an amended 2013 tax return to account for this adjustment. Free state filing income tax Instead, include the difference of $2,000 (but only to the extent this difference would have increased your 2013 tax) on the “Other income” line of your 2014 Form 1040. Free state filing income tax You cannot file Form 1040A for 2014. Free state filing income tax Amounts that do not reduce qualified education expenses. Free state filing income tax   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. Free state filing income tax   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. Free state filing income tax 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 as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Restrictions. Free state filing income tax The use of the money is not restricted. Free state filing income tax Example 1. Free state filing income tax In 2013, Jackie paid $3,000 for tuition and $5,000 for room and board at University X. Free state filing income tax The university did not require her to pay any fees in addition to her tuition in order to enroll in or attend classes. Free state filing income tax To help pay these costs, she was awarded a $2,000 scholarship and a $4,000 student loan. Free state filing income tax The terms of the scholarship state that it can be used to pay any of Jackie's college expenses. Free state filing income tax University X applies the $2,000 scholarship against Jackie's $8,000 total bill, and Jackie pays the $6,000 balance of her bill from University X with a combination of her student loan and her savings. Free state filing income tax Jackie does not report any portion of the scholarship as income on her tax return. Free state filing income tax In figuring the tuition and fees deduction, Jackie must reduce her qualified education expenses by the amount of the scholarship ($2,000) because she excluded the entire scholarship from her income. Free state filing income tax The student loan is not tax-free educational assistance, so she does not need to reduce her qualified expenses by any part of the loan proceeds. Free state filing income tax Jackie is treated as having paid $1,000 in qualified education expenses ($3,000 tuition – $2,000 scholarship) in 2013. Free state filing income tax Example 2. Free state filing income tax The facts are the same as in Example 1, except that Jackie reports her entire scholarship as income on her tax return. Free state filing income tax Because Jackie reported the entire $2,000 scholarship in her income, she does not need to reduce her qualified education expenses. Free state filing income tax Jackie is treated as having paid $3,000 in qualified education expenses. Free state filing income tax 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. Free state filing income tax This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. Free state filing income tax Sports, games, hobbies, and noncredit courses. Free state filing income tax   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. Free state filing income tax However, if the course of instruction or other education is part of the student's degree program, these expenses can qualify. Free state filing income tax Comprehensive or bundled fees. Free state filing income tax   Some eligible educational institutions combine all of their fees for an academic period into one amount. Free state filing income tax 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. Free state filing income tax 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. Free state filing income tax See Figuring the Deduction , later, for more information about Form 1098-T. Free state filing income tax 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 (as defined under Qualified Education Expenses , earlier). Free state filing income tax 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. Free state filing income tax For you to be able to deduct qualified education expenses for your dependent, you must claim an exemption for that individual. Free state filing income tax You do this by listing your dependent's name and other required information on Form 1040 (or Form 1040A), line 6c. Free state filing income tax IF your dependent is an eligible student and you. Free state filing income tax . Free state filing income tax . Free state filing income tax AND. Free state filing income tax . Free state filing income tax . Free state filing income tax THEN. Free state filing income tax . Free state filing income tax . Free state filing income tax 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. Free state filing income tax Your dependent cannot take a deduction. Free state filing income tax claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. Free state filing income tax do not claim an exemption for your dependent you paid all qualified education expenses no one is allowed to take a deduction. Free state filing income tax do not claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. Free state filing income tax Expenses paid by dependent. Free state filing income tax   If your dependent pays qualified education expenses, no one can take a tuition and fees deduction for those expenses. Free state filing income tax Neither you nor your dependent can deduct the expenses. Free state filing income tax For purposes of the tuition and fees deduction, you are not treated as paying any expenses actually paid by a dependent for whom you or anyone other than the dependent can claim an exemption. Free state filing income tax This rule applies even if you do not claim an exemption for your dependent on your tax return. Free state filing income tax Expenses paid by you. Free state filing income tax   If you claim an exemption for a dependent who is an eligible student, only you can include any expenses you paid when figuring your tuition and fees deduction. Free state filing income tax Expenses paid under divorce decree. Free state filing income tax   Qualified education expenses paid directly to an eligible educational institution for a student under a court-approved divorce decree are treated as paid by the student. Free state filing income tax Only the student would be eligible to take a tuition and fees deduction for that payment, and then only if no one else could claim an exemption for the student. Free state filing income tax Expenses paid by others. Free state filing income tax   Someone other than you, your spouse, or your dependent (such as a relative or former spouse) may make a payment directly to an eligible educational institution to pay for an eligible student's qualified education expenses. Free state filing income tax In this case, the student is treated as receiving the payment from the other person and, in turn, paying the institution. Free state filing income tax If you claim, or can claim, an exemption on your tax return for the student, you are not considered to have paid the expenses and you cannot deduct them. Free state filing income tax If the student is not a dependent, only the student can deduct payments made directly to the institution for his or her expenses. Free state filing income tax If the student is your dependent, no one can deduct the payments. Free state filing income tax Example. Free state filing income tax In 2013, Ms. Free state filing income tax Baker makes a payment directly to an eligible educational institution for her grandson Dan's qualified education expenses. Free state filing income tax For purposes of deducting tuition and fees, Dan is treated as receiving the money from his grandmother and, in turn, paying his own qualified education expenses. Free state filing income tax If an exemption cannot be claimed for Dan on anyone else's tax return, only Dan can claim a tuition and fees deduction for his grandmother's payment. Free state filing income tax If someone else can claim an exemption for Dan, no one will be allowed a deduction for Ms. Free state filing income tax Baker's payment. Free state filing income tax Tuition reduction. Free state filing income tax   When an eligible educational institution provides a reduction in tuition to an employee of the institution (or spouse or dependent child of an employee), the amount of the reduction may or may not be taxable. Free state filing income tax If it is taxable, the employee is treated as receiving a payment of that amount and, in turn, paying it to the educational institution on behalf of the student. Free state filing income tax For more information on tuition reductions, see Qualified Tuition Reduction , in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Free state filing income tax Figuring the Deduction The maximum tuition and fees deduction in 2013 is $4,000, $2,000, or $0, depending on the amount of your MAGI. Free state filing income tax See Effect of the Amount of Your Income on the Amount of Your Deduction , later. Free state filing income tax Form 1098-T. Free state filing income tax   To help you figure your tuition and fees deduction, the student should receive Form 1098-T (see Appendix A for a completed example of Form 1098-T). Free state filing income tax 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. Free state filing income tax An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. Free state filing income tax However, the amount in boxes 1 and 2 of Form 1098-T might be different than what you paid. Free state filing income tax When figuring the deduction, use only the amounts you paid in 2013 for qualified education expenses. Free state filing income tax   In addition, Form 1098-T should give other information for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements or refunds, and whether the student was enrolled at least half-time or was a graduate student. Free state filing income tax    The eligible educational institution may ask for a completed Form W-9S or similar statement to obtain the student's name, address, and taxpayer identification number. Free state filing income tax Effect of the Amount of Your Income on the Amount of Your Deduction If your MAGI is not more than $65,000 ($130,000 if you are married filing jointly), your maximum tuition and fees deduction is $4,000. Free state filing income tax If your MAGI is larger than $65,000 ($130,000 if you are married filing jointly), but is not more than $80,000 ($160,000 if you are married filing jointly), your maximum deduction is $2,000. Free state filing income tax No tuition and fees deduction is allowed if your MAGI is larger than $80,000 ($160,000 if you are married filing jointly). Free state filing income tax Modified adjusted gross income (MAGI). Free state filing income tax   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return before subtracting any deduction for tuition and fees. Free state filing income tax However, as discussed below, there may be other modifications. Free state filing income tax MAGI when using Form 1040A. Free state filing income tax   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 19 (tuition and fees deduction). Free state filing income tax MAGI when using Form 1040. Free state filing income tax   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 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 state filing income tax   Table 6-2 shows how the amount of your MAGI can affect your tuition and fees deduction. Free state filing income tax   You can use Worksheet 6-1. Free state filing income tax MAGI for the Tuition and Fees Deduction , later, to figure your MAGI. Free state filing income tax Table 6-2. Free state filing income tax Effect of MAGI on Maximum Tuition and Fees Deduction IF your filing status is. Free state filing income tax . Free state filing income tax . Free state filing income tax AND your MAGI is. Free state filing income tax . Free state filing income tax . Free state filing income tax THEN your maximum tuition and fees deduction is. Free state filing income tax . Free state filing income tax . Free state filing income tax single,  head of household, or qualifying widow(er) not more than $65,000 $4,000. Free state filing income tax more than $65,000  but not more than $80,000 $2,000. Free state filing income tax more than $80,000 $0. Free state filing income tax married filing joint return not more than $130,000 $4,000. Free state filing income tax more than $130,000 but not more than $160,000 $2,000. Free state filing income tax more than $160,000 $0. Free state filing income tax Claiming the Deduction You claim a tuition and fees deduction by completing Form 8917 and submitting it with your Form 1040 or Form 1040A. Free state filing income tax Enter the deduction on Form 1040, line 34, or Form 1040A, line 19. Free state filing income tax A filled-in Form 8917 is shown at the end of this chapter. Free state filing income tax Illustrated Example Tim Pfister, a single taxpayer, enrolled full-time at a local college to earn a degree in engineering. Free state filing income tax This is the first year of his postsecondary education. Free state filing income tax During 2013, he paid $3,600 for his qualified 2013 tuition expense. Free state filing income tax Both he and the college meet all of the requirements for the tuition and fees deduction. Free state filing income tax Tim's total income (Form 1040, line 22) and MAGI are $26,000. Free state filing income tax He figures his deduction of $3,600 as shown on Form 8917, later. Free state filing income tax Worksheet 6-1. Free state filing income tax MAGI for the Tuition and Fees Deduction Use this worksheet if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico. Free state filing income tax Before using this worksheet, you must complete Form 1040, lines 7 through 33, and figure any amount to be entered on the dotted line next to line 36. Free state filing income tax 1. Free state filing income tax Enter the amount from Form 1040, line 22   1. Free state filing income tax         2. Free state filing income tax Enter the total from Form 1040, lines 23 through 33   2. Free state filing income tax               3. Free state filing income tax Enter the total of any amounts entered on the dotted line next to Form 1040, line 36   3. Free state filing income tax               4. Free state filing income tax Add lines 2 and 3   4. Free state filing income tax         5. Free state filing income tax Subtract line 4 from line 1   5. Free state filing income tax         6. Free state filing income tax Enter your foreign earned income exclusion and/or housing  exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   6. Free state filing income tax         7. Free state filing income tax Enter your foreign housing deduction (Form 2555, line 50)   7. Free state filing income tax         8. Free state filing income tax Enter the amount of income from Puerto Rico you are excluding   8. Free state filing income tax         9. Free state filing income tax Enter the amount of income from American Samoa you are  excluding (Form 4563, line 15)   9. Free state filing income tax         10. Free state filing income tax Add lines 5 through 9. Free state filing income tax This is your modified adjusted gross income   10. Free state filing income tax     Note. Free state filing income tax If the amount on line 10 is more than $80,000 ($160,000 if married filing jointly),  you cannot take the deduction for tuition and fees. Free state filing income tax       This image is too large to be displayed in the current screen. Free state filing income tax Please click the link to view the image. 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