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Free Tax Usa 2011

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Free Tax Usa 2011

Free tax usa 2011 27. Free tax usa 2011   Tax Benefits for Work-Related Education Table of Contents What's New Introduction Useful Items - You may want to see: Qualifying Work-Related EducationEducation Required by Employer or by Law Education To Maintain or Improve Skills Education To Meet Minimum Requirements Education That Qualifies You for a New Trade or Business What Expenses Can Be DeductedUnclaimed reimbursement. Free tax usa 2011 Transportation Expenses Travel Expenses No Double Benefit Allowed Reimbursements Deducting Business ExpensesSelf-Employed Persons Employees Performing Artists and Fee-Basis Officials Impairment-Related Work Expenses Recordkeeping What's New Standard mileage rate. Free tax usa 2011  Generally, if you claim a business deduction for work-related education and you drive your car to and from school, the amount you can deduct for miles driven from January 1, 2013, through December 31, 2013, is 56½ cents per mile. Free tax usa 2011 For more information, see Transportation Expenses under What Expenses Can Be Deducted. Free tax usa 2011 Introduction This chapter discusses work-related education expenses that you may be able to deduct as business expenses. Free tax usa 2011 To claim such a deduction, you must: Itemize your deductions on Schedule A (Form 1040) if you are an employee, File Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040) if you are self-employed, and Have expenses for education that meet the requirements discussed under Qualifying Work-Related Education . Free tax usa 2011 If you are an employee and can itemize your deductions, you may be able to claim a deduction for the expenses you pay for your work-related education. Free tax usa 2011 Your deduction will be the amount by which your qualifying work-related education expenses plus other job and certain miscellaneous expenses (except for impairment-related work expenses of disabled individuals) is greater than 2% of your adjusted gross income. Free tax usa 2011 See chapter 28. Free tax usa 2011 If you are self-employed, you deduct your expenses for qualifying work-related education directly from your self-employment income. Free tax usa 2011 Your work-related education expenses may also qualify you for other tax benefits, such as the American opportunity and lifetime learning credits (see chapter 35). Free tax usa 2011 You may qualify for these other benefits even if you do not meet the requirements listed earlier. Free tax usa 2011 Also, keep in mind that your work-related education expenses may qualify you to claim more than one tax benefit. Free tax usa 2011 Generally, you may claim any number of benefits as long as you use different expenses to figure each one. Free tax usa 2011 When you figure your taxes, you may want to compare these tax benefits so you can choose the method(s) that give you the lowest tax liability. Free tax usa 2011 Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 970 Tax Benefits for Education Form (and Instructions) 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses Schedule A (Form 1040) Itemized Deductions Qualifying Work-Related Education You can deduct the costs of qualifying work-related education as business expenses. Free tax usa 2011 This is education that meets at least one of the following two tests. Free tax usa 2011 The education is required by your employer or the law to keep your present salary, status, or job. Free tax usa 2011 The required education must serve a bona fide business purpose of your employer. Free tax usa 2011 The education maintains or improves skills needed in your present work. Free tax usa 2011 However, even if the education meets one or both of the above tests, it is not qualifying work-related education if it: Is needed to meet the minimum educational requirements of your present trade or business, or Is part of a program of study that will qualify you for a new trade or business. Free tax usa 2011 You can deduct the costs of qualifying work-related education as a business expense even if the education could lead to a degree. Free tax usa 2011 Use Figure 27-A, later, as a quick check to see if your education qualifies. Free tax usa 2011 Education Required by Employer or by Law Once you have met the minimum educational requirements for your job, your employer or the law may require you to get more education. Free tax usa 2011 This additional education is qualifying work-related education if all three of the following requirements are met. Free tax usa 2011 It is required for you to keep your present salary, status, or job, The requirement serves a bona fide business purpose of your employer, and The education is not part of a program that will qualify you for a new trade or business. Free tax usa 2011 When you get more education than your employer or the law requires, the additional education can be qualifying work-related education only if it maintains or improves skills required in your present work. Free tax usa 2011 See Education To Maintain or Improve Skills , later. Free tax usa 2011 Example. Free tax usa 2011 You are a teacher who has satisfied the minimum requirements for teaching. Free tax usa 2011 Your employer requires you to take an additional college course each year to keep your teaching job. Free tax usa 2011 If the courses will not qualify you for a new trade or business, they are qualifying work-related education even if you eventually receive a master's degree and an increase in salary because of this extra education. Free tax usa 2011 Education To Maintain or Improve Skills If your education is not required by your employer or the law, it can be qualifying work-related education only if it maintains or improves skills needed in your present work. Free tax usa 2011 This could include refresher courses, courses on current developments, and academic or vocational courses. Free tax usa 2011 Example. Free tax usa 2011 You repair televisions, radios, and stereo systems for XYZ Store. Free tax usa 2011 To keep up with the latest changes, you take special courses in radio and stereo service. Free tax usa 2011 These courses maintain and improve skills required in your work. Free tax usa 2011 Maintaining skills vs. Free tax usa 2011 qualifying for new job. Free tax usa 2011   Education to maintain or improve skills needed in your present work is not qualifying education if it will also qualify you for a new trade or business. Free tax usa 2011 Education during temporary absence. Free tax usa 2011   If you stop working for a year or less in order to get education to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. Free tax usa 2011 Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. Free tax usa 2011 Example. Free tax usa 2011 You quit your biology research job to become a full-time biology graduate student for one year. Free tax usa 2011 If you return to work in biology research after completing the courses, the education is related to your present work even if you do not go back to work with the same employer. Free tax usa 2011 Education during indefinite absence. Free tax usa 2011   If you stop work for more than a year, your absence from your job is considered indefinite. Free tax usa 2011 Education during an indefinite absence, even if it maintains or improves skills needed in the work from which you are absent, is considered to qualify you for a new trade or business. Free tax usa 2011 Therefore, it is not qualifying work-related education. Free tax usa 2011 Education To Meet Minimum Requirements Education you need to meet the minimum educational requirements for your present trade or business is not qualifying work-related education. Free tax usa 2011 The minimum educational requirements are determined by: Laws and regulations, Standards of your profession, trade, or business, and Your employer. Free tax usa 2011 Once you have met the minimum educational requirements that were in effect when you were hired, you do not have to meet any new minimum educational requirements. Free tax usa 2011 This means that if the minimum requirements change after you were hired, any education you need to meet the new requirements can be qualifying education. Free tax usa 2011 You have not necessarily met the minimum educational requirements of your trade or business simply because you are already doing the work. Free tax usa 2011 Example 1. Free tax usa 2011 You are a full-time engineering student. Free tax usa 2011 Although you have not received your degree or certification, you work part-time as an engineer for a firm that will employ you as a full-time engineer after you finish college. Free tax usa 2011 Although your college engineering courses improve your skills in your present job, they are also needed to meet the minimum job requirements for a full-time engineer. Free tax usa 2011 The education is not qualifying work-related education. Free tax usa 2011 Example 2. Free tax usa 2011 You are an accountant and you have met the minimum educational requirements of your employer. Free tax usa 2011 Your employer later changes the minimum educational requirements and requires you to take college courses to keep your job. Free tax usa 2011 These additional courses can be qualifying work-related education because you have already satisfied the minimum requirements that were in effect when you were hired. Free tax usa 2011 Requirements for Teachers States or school districts usually set the minimum educational requirements for teachers. Free tax usa 2011 The requirement is the college degree or the minimum number of college hours usually required of a person hired for that position. Free tax usa 2011 If there are no requirements, you will have met the minimum educational requirements when you become a faculty member. Free tax usa 2011 The determination of whether you are a faculty member of an educational institution must be made on the basis of the particular practices of the institution. Free tax usa 2011 You generally will be considered a faculty member when one or more of the following occurs. Free tax usa 2011 You have tenure. Free tax usa 2011 Your years of service count toward obtaining tenure. Free tax usa 2011 You have a vote in faculty decisions. Free tax usa 2011 Your school makes contributions for you to a retirement plan other than social security or a similar program. Free tax usa 2011 Example 1. Free tax usa 2011 The law in your state requires beginning secondary school teachers to have a bachelor's degree, including 10 professional education courses. Free tax usa 2011 In addition, to keep the job a teacher must complete a fifth year of training within 10 years from the date of hire. Free tax usa 2011 If the employing school certifies to the state Department of Education that qualified teachers cannot be found, the school can hire persons with only 3 years of college. Free tax usa 2011 However, to keep their jobs, these teachers must get a bachelor's degree and the required professional education courses within 3 years. Free tax usa 2011 Under these facts, the bachelor's degree, whether or not it includes the 10 professional education courses, is considered the minimum educational requirement for qualification as a teacher in your state. Free tax usa 2011 If you have all the required education except the fifth year, you have met the minimum educational requirements. Free tax usa 2011 The fifth year of training is qualifying work-related education unless it is part of a program of study that will qualify you for a new trade or business. Free tax usa 2011 Figure 27-A Does Your Work-Related Education Qualify? Please click here for the text description of the image. Free tax usa 2011 Figure 27-A. Free tax usa 2011 Does Your Work-Related Education Qualify?" Example 2. Free tax usa 2011 Assume the same facts as in Example 1 except that you have a bachelor's degree and only six professional education courses. Free tax usa 2011 The additional four education courses can be qualifying work-related education. Free tax usa 2011 Although you do not have all the required courses, you have already met the minimum educational requirements. Free tax usa 2011 Example 3. Free tax usa 2011 Assume the same facts as in Example 1 except that you are hired with only 3 years of college. Free tax usa 2011 The courses you take that lead to a bachelor's degree (including those in education) are not qualifying work-related education. Free tax usa 2011 They are needed to meet the minimum educational requirements for employment as a teacher. Free tax usa 2011 Example 4. Free tax usa 2011 You have a bachelor's degree and you work as a temporary instructor at a university. Free tax usa 2011 At the same time, you take graduate courses toward an advanced degree. Free tax usa 2011 The rules of the university state that you can become a faculty member only if you get a graduate degree. Free tax usa 2011 Also, you can keep your job as an instructor only as long as you show satisfactory progress toward getting this degree. Free tax usa 2011 You have not met the minimum educational requirements to qualify you as a faculty member. Free tax usa 2011 The graduate courses are not qualifying work-related education. Free tax usa 2011 Certification in a new state. Free tax usa 2011   Once you have met the minimum educational requirements for teachers for your state, you are considered to have met the minimum educational requirements in all states. Free tax usa 2011 This is true even if you must get additional education to be certified in another state. Free tax usa 2011 Any additional education you need is qualifying work-related education. Free tax usa 2011 You have already met the minimum requirements for teaching. Free tax usa 2011 Teaching in another state is not a new trade or business. Free tax usa 2011 Example. Free tax usa 2011 You hold a permanent teaching certificate in State A and are employed as a teacher in that state for several years. Free tax usa 2011 You move to State B and are promptly hired as a teacher. Free tax usa 2011 You are required, however, to complete certain prescribed courses to get a permanent teaching certificate in State B. Free tax usa 2011 These additional courses are qualifying work-related education because the teaching position in State B involves the same general kind of work for which you were qualified in State A. Free tax usa 2011 Education That Qualifies You for a New Trade or Business Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education. Free tax usa 2011 This is true even if you do not plan to enter that trade or business. Free tax usa 2011 If you are an employee, a change of duties that involves the same general kind of work is not a new trade or business. Free tax usa 2011 Example 1. Free tax usa 2011 You are an accountant. Free tax usa 2011 Your employer requires you to get a law degree at your own expense. Free tax usa 2011 You register at a law school for the regular curriculum that leads to a law degree. Free tax usa 2011 Even if you do not intend to become a lawyer, the education is not qualifying because the law degree will qualify you for a new trade or business. Free tax usa 2011 Example 2. Free tax usa 2011 You are a general practitioner of medicine. Free tax usa 2011 You take a 2-week course to review developments in several specialized fields of medicine. Free tax usa 2011 The course does not qualify you for a new profession. Free tax usa 2011 It is qualifying work-related education because it maintains or improves skills required in your present profession. Free tax usa 2011 Example 3. Free tax usa 2011 While working in the private practice of psychiatry, you enter a program to study and train at an accredited psychoanalytic institute. Free tax usa 2011 The program will lead to qualifying you to practice psychoanalysis. Free tax usa 2011 The psychoanalytic training does not qualify you for a new profession. Free tax usa 2011 It is qualifying work-related education because it maintains or improves skills required in your present profession. Free tax usa 2011 Bar or CPA Review Course Review courses to prepare for the bar examination or the certified public accountant (CPA) examination are not qualifying work-related education. Free tax usa 2011 They are part of a program of study that can qualify you for a new profession. Free tax usa 2011 Teaching and Related Duties All teaching and related duties are considered the same general kind of work. Free tax usa 2011 A change in duties in any of the following ways is not considered a change to a new business. Free tax usa 2011 Elementary school teacher to secondary school teacher. Free tax usa 2011 Teacher of one subject, such as biology, to teacher of another subject, such as art. Free tax usa 2011 Classroom teacher to guidance counselor. Free tax usa 2011 Classroom teacher to school administrator. Free tax usa 2011 What Expenses Can Be Deducted If your education meets the requirements described earlier under Qualifying Work-Related Education , you can generally deduct your education expenses as business expenses. Free tax usa 2011 If you are not self-employed, you can deduct business expenses only if you itemize your deductions. Free tax usa 2011 You cannot deduct expenses related to tax-exempt and excluded income. Free tax usa 2011 Deductible expenses. Free tax usa 2011   The following education expenses can be deducted. Free tax usa 2011 Tuition, books, supplies, lab fees, and similar items. Free tax usa 2011 Certain transportation and travel costs. Free tax usa 2011 Other education expenses, such as costs of research and typing when writing a paper as part of an educational program. Free tax usa 2011 Nondeductible expenses. Free tax usa 2011   You cannot deduct personal or capital expenses. Free tax usa 2011 For example, you cannot deduct the dollar value of vacation time or annual leave you take to attend classes. Free tax usa 2011 This amount is a personal expense. Free tax usa 2011 Unclaimed reimbursement. Free tax usa 2011   If you do not claim reimbursement that you are entitled to receive from your employer, you cannot deduct the expenses that apply to that unclaimed reimbursement. Free tax usa 2011 Example. Free tax usa 2011 Your employer agrees to pay your education expenses if you file a voucher showing your expenses. Free tax usa 2011 You do not file a voucher, and you do not get reimbursed. Free tax usa 2011 Because you did not file a voucher, you cannot deduct the expenses on your tax return. Free tax usa 2011 Transportation Expenses If your education qualifies, you can deduct local transportation costs of going directly from work to school. Free tax usa 2011 If you are regularly employed and go to school on a temporary basis, you can also deduct the costs of returning from school to home. Free tax usa 2011 Temporary basis. Free tax usa 2011   You go to school on a temporary basis if either of the following situations applies to you. Free tax usa 2011 Your attendance at school is realistically expected to last 1 year or less and does indeed last for 1 year or less. Free tax usa 2011 Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Free tax usa 2011 Your attendance is temporary up to the date you determine it will last more than 1 year. Free tax usa 2011 Note. Free tax usa 2011 If you are in either situation (1) or (2), your attendance is not temporary if facts and circumstances indicate otherwise. Free tax usa 2011 Attendance not on a temporary basis. Free tax usa 2011   You do not go to school on a temporary basis if either of the following situations apply to you. Free tax usa 2011 Your attendance at school is realistically expected to last more than 1 year. Free tax usa 2011 It does not matter how long you actually attend. Free tax usa 2011 Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Free tax usa 2011 Your attendance is not temporary after the date you determine it will last more than 1 year. Free tax usa 2011 Deductible Transportation Expenses If you are regularly employed and go directly from home to school on a temporary basis, you can deduct the round-trip costs of transportation between your home and school. Free tax usa 2011 This is true regardless of the location of the school, the distance traveled, or whether you attend school on nonwork days. Free tax usa 2011 Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. Free tax usa 2011 Transportation expenses do not include amounts spent for travel, meals, or lodging while you are away from home overnight. Free tax usa 2011 Example 1. Free tax usa 2011 You regularly work in a nearby town, and go directly from work to home. Free tax usa 2011 You also attend school every work night for 3 months to take a course that improves your job skills. Free tax usa 2011 Since you are attending school on a temporary basis, you can deduct your daily round-trip transportation expenses in going between home and school. Free tax usa 2011 This is true regardless of the distance traveled. Free tax usa 2011 Example 2. Free tax usa 2011 Assume the same facts as in Example 1 except that on certain nights you go directly from work to school and then home. Free tax usa 2011 You can deduct your transportation expenses from your regular work site to school and then home. Free tax usa 2011 Example 3. Free tax usa 2011 Assume the same facts as in Example 1 except that you attend the school for 9 months on Saturdays, nonwork days. Free tax usa 2011 Since you are attending school on a temporary basis, you can deduct your round-trip transportation expenses in going between home and school. Free tax usa 2011 Example 4. Free tax usa 2011 Assume the same facts as in Example 1 except that you attend classes twice a week for 15 months. Free tax usa 2011 Since your attendance in school is not considered temporary, you cannot deduct your transportation expenses in going between home and school. Free tax usa 2011 If you go directly from work to school, you can deduct the one-way transportation expenses of going from work to school. Free tax usa 2011 If you go from work to home to school and return home, your transportation expenses cannot be more than if you had gone directly from work to school. Free tax usa 2011 Using your car. Free tax usa 2011   If you use your car (whether you own or lease it) for transportation to school, you can deduct your actual expenses or use the standard mileage rate to figure the amount you can deduct. Free tax usa 2011 The standard mileage rate for miles driven from January 1, 2013, through December 31, 2013 is 56½ cents per mile. Free tax usa 2011 Whichever method you use, you can also deduct parking fees and tolls. Free tax usa 2011 See chapter 26 for information on deducting your actual expenses of using a car. Free tax usa 2011 Travel Expenses You can deduct expenses for travel, meals (see 50% limit on meals , later), and lodging if you travel overnight mainly to obtain qualifying work-related education. Free tax usa 2011 Travel expenses for qualifying work-related education are treated the same as travel expenses for other employee business purposes. Free tax usa 2011 For more information, see chapter 26. Free tax usa 2011 You cannot deduct expenses for personal activities, such as sightseeing, visiting, or entertaining. Free tax usa 2011 Mainly personal travel. Free tax usa 2011   If your travel away from home is mainly personal, you cannot deduct all of your expenses for travel, meals, and lodging. Free tax usa 2011 You can deduct only your expenses for lodging and 50% of your expenses for meals during the time you attend the qualified educational activities. Free tax usa 2011   Whether a trip's purpose is mainly personal or educational depends upon the facts and circumstances. Free tax usa 2011 An important factor is the comparison of time spent on personal activities with time spent on educational activities. Free tax usa 2011 If you spend more time on personal activities, the trip is considered mainly educational only if you can show a substantial nonpersonal reason for traveling to a particular location. Free tax usa 2011 Example 1. Free tax usa 2011 John works in Newark, New Jersey. Free tax usa 2011 He traveled to Chicago to take a deductible 1-week course at the request of his employer. Free tax usa 2011 His main reason for going to Chicago was to take the course. Free tax usa 2011 While there, he took a sight-seeing trip, entertained some friends, and took a side trip to Pleasantville for a day. Free tax usa 2011 Since the trip was mainly for business, John can deduct his round-trip airfare to Chicago. Free tax usa 2011 He cannot deduct his transportation expenses of going to Pleasantville. Free tax usa 2011 He can deduct only the meals (subject to the 50% limit) and lodging connected with his educational activities. Free tax usa 2011 Example 2. Free tax usa 2011 Sue works in Boston. Free tax usa 2011 She went to a university in Michigan to take a course for work. Free tax usa 2011 The course is qualifying work-related education. Free tax usa 2011 She took one course, which is one-fourth of a full course load of study. Free tax usa 2011 She spent the rest of the time on personal activities. Free tax usa 2011 Her reasons for taking the course in Michigan were all personal. Free tax usa 2011 Sue's trip is mainly personal because three-fourths of her time is considered personal time. Free tax usa 2011 She cannot deduct the cost of her round-trip train ticket to Michigan. Free tax usa 2011 She can deduct one-fourth of the meals (subject to the 50% limit) and lodging costs for the time she attended the university. Free tax usa 2011 Example 3. Free tax usa 2011 Dave works in Nashville and recently traveled to California to take a 2-week seminar. Free tax usa 2011 The seminar is qualifying work-related education. Free tax usa 2011 While there, he spent an extra 8 weeks on personal activities. Free tax usa 2011 The facts, including the extra 8-week stay, show that his main purpose was to take a vacation. Free tax usa 2011 Dave cannot deduct his round-trip airfare or his meals and lodging for the 8 weeks. Free tax usa 2011 He can deduct only his expenses for meals (subject to the 50% limit) and lodging for the 2 weeks he attended the seminar. Free tax usa 2011 Cruises and conventions. Free tax usa 2011   Certain cruises and conventions offer seminars or courses as part of their itinerary. Free tax usa 2011 Even if the seminars or courses are work-related, your deduction for travel may be limited. Free tax usa 2011 This applies to: Travel by ocean liner, cruise ship, or other form of luxury water transportation, and Conventions outside the North American area. Free tax usa 2011   For a discussion of the limits on travel expense deductions that apply to cruises and conventions, see Luxury Water Travel and Conventions in chapter 1 of Publication 463. Free tax usa 2011 50% limit on meals. Free tax usa 2011   You can deduct only 50% of the cost of your meals while traveling away from home to obtain qualifying work-related education. Free tax usa 2011 You cannot have been reimbursed for the meals. Free tax usa 2011   Employees must use Form 2106 or Form 2106-EZ to apply the 50% limit. Free tax usa 2011 Travel as Education You cannot deduct the cost of travel as a form of education even if it is directly related to your duties in your work or business. Free tax usa 2011 Example. Free tax usa 2011 You are a French language teacher. Free tax usa 2011 While on sabbatical leave granted for travel, you traveled through France to improve your knowledge of the French language. Free tax usa 2011 You chose your itinerary and most of your activities to improve your French language skills. Free tax usa 2011 You cannot deduct your travel expenses as education expenses. Free tax usa 2011 This is true even if you spent most of your time learning French by visiting French schools and families, attending movies or plays, and engaging in similar activities. Free tax usa 2011 No Double Benefit Allowed You cannot do either of the following. Free tax usa 2011 Deduct work-related education expenses as business expenses if you benefit from these expenses under any other provision of the law, for example, the tuition and fees deduction (see chapter 35). Free tax usa 2011 Deduct work-related education expenses paid with tax-free scholarship, grant, or employer-provided educational assistance. Free tax usa 2011 See Adjustments to Qualifying Work-Related Education Expenses , next. Free tax usa 2011 Adjustments to Qualifying Work-Related Education Expenses If you pay qualifying work-related education expenses with certain tax-free funds, you cannot claim a deduction for those amounts. Free tax usa 2011 You must reduce the qualifying expenses by the amount of such expenses allocable to the tax-free educational assistance. Free tax usa 2011 For more information, see chapter 12 of Publication 970. Free tax usa 2011 Tax-free educational assistance includes: The tax-free part of scholarships and fellowships (see chapter 1 of Publication 970), The tax-free part of Pell grants (see chapter 1 of Publication 970), The tax-free part of employer-provided educational assistance (see chapter 11 of Publication 970), Veterans' educational assistance (see chapter 1 of Publication 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received for education assistance. Free tax usa 2011 Amounts that do not reduce qualifying work-related education expenses. Free tax usa 2011   Do not reduce the qualifying work-related 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 tax usa 2011   Also, do not reduce the qualifying work-related education expenses by any scholarship or fellowship reported as income on the student's return or any scholarship which, by its terms, cannot be applied to qualifying work-related education expenses. Free tax usa 2011 Reimbursements How you treat reimbursements depends on the arrangement you have with your employer. Free tax usa 2011 There are two basic types of reimbursement arrangements—accountable plans and nonaccountable plans. Free tax usa 2011 You can tell the type of plan you are reimbursed under by the way the reimbursement is reported on your Form W-2. Free tax usa 2011 For information on how to treat reimbursements under both accountable and nonaccountable plans, see Reimbursements in chapter 26. Free tax usa 2011 Deducting Business Expenses Self-employed persons and employees report business expenses differently. Free tax usa 2011 The following information explains what forms you must use to deduct the cost of your qualifying work-related education as a business expense. Free tax usa 2011 Self-Employed Persons If you are self-employed, report the cost of your qualifying work-related education on the appropriate form used to report your business income and expenses (generally Schedule C, C-EZ, or F). Free tax usa 2011 If your educational expenses include expenses for a car or truck, travel, or meals, report those expenses the same way you report other business expenses for those items. Free tax usa 2011 See the instructions for the form you file for information on how to complete it. Free tax usa 2011 Employees If you are an employee, you can deduct the cost of qualifying work-related education only if you: Did not receive (and were not entitled to receive) any reimbursement from your employer, Were reimbursed under a nonaccountable plan (amount is included in box 1 of Form W-2), or Received reimbursement under an accountable plan, but the amount received was less than your expenses for which you claimed reimbursement. Free tax usa 2011 If either (1) or (2) applies, you can deduct the total qualifying cost. Free tax usa 2011 If (3) applies, you can deduct only the qualifying costs that were more than your reimbursement. Free tax usa 2011 In order to deduct the cost of your qualifying work-related education as a business expense, include the amount with your deduction for any other employee business expenses on Schedule A (Form 1040), line 21. Free tax usa 2011 (Special rules for expenses of certain performing artists and fee-basis officials and for impairment-related work expenses are explained later. Free tax usa 2011 ) This deduction (except for impairment-related work expenses of disabled individuals) is subject to the 2%-of-adjusted-gross-income limit that applies to most miscellaneous itemized deductions. Free tax usa 2011 See chapter 28. Free tax usa 2011 Form 2106 or 2106-EZ. Free tax usa 2011   To figure your deduction for employee business expenses, including qualifying work-related education, you generally must complete Form 2106 or Form 2106-EZ. Free tax usa 2011 Form not required. Free tax usa 2011   Do not complete either Form 2106 or Form 2106-EZ if: If amounts included in box 1 of your Form W-2, are not considered reimbursements, and You are not claiming travel, transportation, meal, or entertainment expenses. Free tax usa 2011   If you meet both of these requirements, enter the expenses directly on Schedule A (Form 1040), line 21. Free tax usa 2011 (Special rules for expenses of certain performing artists and fee-basis officials and for impairment-related work expenses are explained later. Free tax usa 2011 ) Using Form 2106-EZ. Free tax usa 2011   This form is shorter and easier to use than Form 2106. Free tax usa 2011 Generally, you can use this form if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are using the standard mileage rate if you are claiming vehicle expenses. Free tax usa 2011   If you do not meet both of these requirements, use Form 2106. Free tax usa 2011 Performing Artists and Fee-Basis Officials If you are a qualified performing artist, or a state (or local) government official who is paid in whole or in part on a fee basis, you can deduct the cost of your qualifying work-related education as an adjustment to gross income rather than as an itemized deduction. Free tax usa 2011 Include the cost of your qualifying work-related education with any other employee business expenses on Form 1040, line 24. Free tax usa 2011 You do not have to itemize your deductions on Schedule A (Form 1040), and, therefore, the deduction is not subject to the 2%-of-adjusted-gross-income limit. Free tax usa 2011 You must complete Form 2106 or 2106-EZ to figure your deduction, even if you meet the requirements described earlier under Form not required . Free tax usa 2011 For more information on qualified performing artists, see chapter 6 of Publication 463. Free tax usa 2011 Impairment-Related Work Expenses If you are disabled and have impairment-related work expenses that are necessary for you to be able to get qualifying work-related education, you can deduct these expenses on Schedule A (Form 1040), line 28. Free tax usa 2011 They are not subject to the 2%-of-adjusted-gross-income limit. Free tax usa 2011 To deduct these expenses, you must complete Form 2106 or 2106-EZ even if you meet the requirements described earlier under Form not required . Free tax usa 2011 For more information on impairment-related work expenses, see chapter 6 of Publication 463. Free tax usa 2011 Recordkeeping You must keep records as proof of any deduction claimed on your tax return. Free tax usa 2011 Generally, you should keep your records for 3 years from the date of filing the tax return and claiming the deduction. Free tax usa 2011 For specific information about keeping records of business expenses, see Recordkeeping in chapter 26. 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Understanding Your CP20 Notice

We believe you incorrectly claimed one or more deductions or credits. As a result, your refund is less than you expected.


What you need to do

  • Review your notice and compare our changes to your tax return.
  • Complete and return the Response form.

You may want to...

  • Review this notice with your tax preparer.
  • Read about the deduction or credit in Publication 17.
  • Call us for clarification at the number listed on your notice.

Answers to Common Questions

What is the notice telling me?
Based on the information shown on your tax return, it appears you have not met the requirements for claiming one or more deductions or credits. As a result, your refund is less than you expected.

What do I have to do?
Review the requirements for the deduction or credit we adjusted. Return the Response form indicating thereon your agreement or disagreement with the changes we made.

If you feel your tax return was correct as filed, send us the documentation listed on page 2 of the notice to verify you qualify for the exemption or credit.


Tips for next year

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.

Page Last Reviewed or Updated: 20-Feb-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 Tax Usa 2011

Free tax usa 2011 11. Free tax usa 2011   Your Rights as a Taxpayer Table of Contents Declaration of Taxpayer Rights Examinations, Appeals, Collections, and RefundsBy mail. Free tax usa 2011 By interview. Free tax usa 2011 Repeat examinations. Free tax usa 2011 The first part of this chapter explains some of your most important rights as a taxpayer. Free tax usa 2011 The second part explains the examination, appeal, collection, and refund processes. Free tax usa 2011 Declaration of Taxpayer Rights Protection of your rights. Free tax usa 2011   IRS employees will explain and protect your rights as a taxpayer throughout your contact with us. Free tax usa 2011 Privacy and confidentiality. Free tax usa 2011   The IRS will not disclose to anyone the information you give us, except as authorized by law. Free tax usa 2011 You have the right to know why we are asking you for information, how we will use it, and what happens if you do not provide requested information. Free tax usa 2011 Professional and courteous service. Free tax usa 2011   If you believe that an IRS employee has not treated you in a professional, fair, and courteous manner, you should tell that employee's supervisor. Free tax usa 2011 If the supervisor's response is not satisfactory, you should write to the IRS director for your area or the center where you file your return. Free tax usa 2011 Representation. Free tax usa 2011   You can either represent yourself or, with proper written authorization, have someone else represent you in your place. Free tax usa 2011 Your representative must be a person allowed to practice before the IRS, such as an attorney, certified public accountant, or enrolled agent. Free tax usa 2011 If you are in an interview and ask to consult such a person, then we must stop and reschedule the interview in most cases. Free tax usa 2011   You can have someone accompany you at an interview. Free tax usa 2011 You can make sound recordings of any meetings with our examination, appeal, or collection personnel, provided you tell us in writing 10 days before the meeting. Free tax usa 2011 Payment of only the correct amount of tax. Free tax usa 2011   You are responsible for paying only the correct amount of tax due under the law—no more, no less. Free tax usa 2011 If you cannot pay all of your tax when it is due, you may be able to make monthly installment payments. Free tax usa 2011 Help with unresolved tax problems. Free tax usa 2011   The Taxpayer Advocate Service can help you if you have tried unsuccessfully to resolve a problem with the IRS. Free tax usa 2011 Your local Taxpayer Advocate can offer you special help if you have a significant hardship as a result of a tax problem. Free tax usa 2011 For more information, call toll free 1-877-777-4778 (1-800-829-4059 for TTY/TDD) or write to the Taxpayer Advocate at the IRS office that last contacted you. Free tax usa 2011 Appeals and judicial review. Free tax usa 2011   If you disagree with us about the amount of your tax liability or certain collection actions, you have the right to ask the Appeals Office to review your case. Free tax usa 2011 You can also ask a court to review your case. Free tax usa 2011 Relief from certain penalties and interest. Free tax usa 2011   The IRS will waive penalties when allowed by law if you can show you acted reasonably and in good faith or relied on the incorrect advice of an IRS employee. Free tax usa 2011 We will waive interest that is the result of certain errors or delays caused by an IRS employee. Free tax usa 2011 Examinations, Appeals, Collections, and Refunds Examinations (audits). Free tax usa 2011   We accept most taxpayers' returns as filed. Free tax usa 2011 If we inquire about your return or select it for examination, it does not suggest that you are dishonest. Free tax usa 2011 The inquiry or examination may or may not result in more tax. Free tax usa 2011 We may close your case without change; or, you may receive a refund. Free tax usa 2011   The process of selecting a return for examination usually begins in one of two ways. Free tax usa 2011 First, we use computer programs to identify returns that may have incorrect amounts. Free tax usa 2011 These programs may be based on information returns, such as Forms 1099 and W-2, on studies of past examinations, or on certain issues identified by compliance projects. Free tax usa 2011 Second, we use information from outside sources that indicates that a return may have incorrect amounts. Free tax usa 2011 These sources may include newspapers, public records, and individuals. Free tax usa 2011 If we determine that the information is accurate and reliable, we may use it to select a return for examination. Free tax usa 2011   Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund, explains the rules and procedures that we follow in examinations. Free tax usa 2011 The following sections give an overview of how we conduct examinations. Free tax usa 2011 By mail. Free tax usa 2011   We handle many examinations and inquiries by mail. Free tax usa 2011 We will send you a letter with either a request for more information or a reason why we believe a change to your return may be needed. Free tax usa 2011 You can respond by mail or you can request a personal interview with an examiner. Free tax usa 2011 If you mail us the requested information or provide an explanation, we may or may not agree with you, and we will explain the reasons for any changes. Free tax usa 2011 Please do not hesitate to write to us about anything you do not understand. Free tax usa 2011 By interview. Free tax usa 2011   If we notify you that we will conduct your examination through a personal interview, or you request such an interview, you have the right to ask that the examination take place at a reasonable time and place that is convenient for both you and the IRS. Free tax usa 2011 If our examiner proposes any changes to your return, he or she will explain the reasons for the changes. Free tax usa 2011 If you do not agree with these changes, you can meet with the examiner's supervisor. Free tax usa 2011 Repeat examinations. Free tax usa 2011   If we examined your return for the same items in either of the 2 previous years and proposed no change to your tax liability, please contact us as soon as possible so we can see if we should discontinue the examination. Free tax usa 2011 Appeals. Free tax usa 2011   If you do not agree with the examiner's proposed changes, you can appeal them to the Appeals Office of the IRS. Free tax usa 2011 Most differences can be settled without expensive and time-consuming court trials. Free tax usa 2011 Your appeal rights are explained in detail in both Publication 5, Your Appeal Rights and How To Prepare a Protest If You Don't Agree, and Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund. Free tax usa 2011   If you do not wish to use the Appeals Office or disagree with its findings, you may be able to take your case to the U. Free tax usa 2011 S. Free tax usa 2011 Tax Court, U. Free tax usa 2011 S. Free tax usa 2011 Court of Federal Claims, or the U. Free tax usa 2011 S. Free tax usa 2011 District Court where you live. Free tax usa 2011 If you take your case to court, the IRS will have the burden of proving certain facts if you kept adequate records to show your tax liability, cooperated with the IRS, and meet certain other conditions. Free tax usa 2011 If the court agrees with you on most issues in your case and finds that our position was largely unjustified, you may be able to recover some of your administrative and litigation costs. Free tax usa 2011 You will not be eligible to recover these costs unless you tried to resolve your case administratively, including going through the appeals system, and you gave us the information necessary to resolve the case. Free tax usa 2011 Collections. Free tax usa 2011   Publication 594, The IRS Collection Process, explains your rights and responsibilities regarding payment of federal taxes. Free tax usa 2011 It describes: What to do when you owe taxes. Free tax usa 2011 It describes what to do if you get a tax bill and what to do if you think your bill is wrong. Free tax usa 2011 It also covers making installment payments, delaying collection action, and submitting an offer in compromise. Free tax usa 2011 IRS collection actions. Free tax usa 2011 It covers liens, releasing a lien, levies, releasing a levy, seizures and sales, and release of property. Free tax usa 2011   Your collection appeal rights are explained in detail in Publication 1660, Collection Appeal Rights. Free tax usa 2011 Innocent spouse relief. Free tax usa 2011   Generally, both you and your spouse are responsible, jointly and individually, for paying the full amount of any tax, interest, or penalties due on your joint return. Free tax usa 2011 To seek relief from any liability related to your spouse (or former spouse), you must file a claim on Form 8857, Request for Innocent Spouse Relief. Free tax usa 2011 In some cases, Form 8857 may need to be filed within 2 years of the date on which the IRS first attempted to collect the tax from you. Free tax usa 2011 Do not file Form 8857 with your Form 1040. Free tax usa 2011 For more information, see Publication 971, Innocent Spouse Relief, and Form 8857 or you can call the Innocent Spouse office toll-free at 1-855-851-2009. Free tax usa 2011 Refunds. Free tax usa 2011   You can file a claim for refund if you think you paid too much tax. Free tax usa 2011 You must generally file the claim within 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. Free tax usa 2011 The law generally provides for interest on your refund if it is not paid within 45 days of the date you filed your return or claim for refund. Free tax usa 2011 Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund, has more information on refunds. Free tax usa 2011   If you were due a refund but you did not file a return, you must file within 3 years from the date the return was due (including extensions) to get that refund. Free tax usa 2011 Prev  Up  Next   Home   More Online Publications