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2012 1040

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2012 1040

2012 1040 6. 2012 1040   Tuition and Fees Deduction Table of Contents IntroductionWhat is the tax benefit of the tuition and fees deduction. 2012 1040 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). 2012 1040 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. 2012 1040 The qualified expenses must be for higher education, as explained later under Qualified Education Expenses . 2012 1040 What is the tax benefit of the tuition and fees deduction. 2012 1040   The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. 2012 1040   This deduction is taken as an adjustment to income. 2012 1040 This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). 2012 1040 This deduction may be beneficial to you if you do not qualify for the American opportunity or lifetime learning credits. 2012 1040 You can choose the education benefit that will give you the lowest tax. 2012 1040 You may want to compare the tuition and fees deduction to the education credits. 2012 1040 See chapter 2, American Opportunity Credit and chapter 3, Lifetime Learning Credit for more information on the education credits. 2012 1040 Table 6-1. 2012 1040 Tuition and Fees Deduction at a Glance summarizes the features of the tuition and fees deduction. 2012 1040 Can You Claim the Deduction The following rules will help you determine if you can claim the tuition and fees deduction. 2012 1040 Who Can Claim the Deduction Generally, you can claim the tuition and fees deduction if all three of the following requirements are met. 2012 1040 You pay qualified education expenses of higher education. 2012 1040 You pay the education expenses for an eligible student. 2012 1040 The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption on your tax return. 2012 1040 The term “qualified education expenses” is defined later under Qualified Education Expenses . 2012 1040 “Eligible student” is defined later under Who Is an Eligible Student . 2012 1040 For more information on claiming the deduction for a dependent, see Who Can Claim a Dependent's Expenses , later. 2012 1040 Table 6-1. 2012 1040 Tuition and Fees Deduction at a Glance Do not rely on this table alone. 2012 1040 Refer to the text for complete details. 2012 1040 Question Answer What is the maximum benefit? You can reduce your income subject to tax by up to $4,000. 2012 1040 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). 2012 1040 Where is the deduction taken? As an adjustment to income on  Form 1040 or Form 1040A. 2012 1040 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. 2012 1040 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. 2012 1040 Who Cannot Claim the Deduction You cannot claim the tuition and fees deduction if any of the following apply. 2012 1040 Your filing status is married filing separately. 2012 1040 Another person can claim an exemption for you as a dependent on his or her tax return. 2012 1040 You cannot take the deduction even if the other person does not actually claim that exemption. 2012 1040 Your modified adjusted gross income (MAGI) is more than $80,000 ($160,000 if filing a joint return). 2012 1040 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. 2012 1040 More information on nonresident aliens can be found in Publication 519. 2012 1040 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. 2012 1040 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. 2012 1040 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. 2012 1040 Academic period. 2012 1040   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. 2012 1040 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. 2012 1040 Paid with borrowed funds. 2012 1040   You can claim a tuition and fees deduction for qualified education expenses paid with the proceeds of a loan. 2012 1040 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. 2012 1040 Treat loan disbursements sent directly to the educational institution as paid on the date the institution credits the student's account. 2012 1040 Student withdraws from class(es). 2012 1040   You can claim a tuition and fees deduction for qualified education expenses not refunded when a student withdraws. 2012 1040 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. 2012 1040 Eligible educational institution. 2012 1040   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. 2012 1040 S. 2012 1040 Department of Education. 2012 1040 It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. 2012 1040 The educational institution should be able to tell you if it is an eligible educational institution. 2012 1040   Certain educational institutions located outside the United States also participate in the U. 2012 1040 S. 2012 1040 Department of Education's Federal Student Aid (FSA) programs. 2012 1040 Related expenses. 2012 1040   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. 2012 1040 Prepaid expenses. 2012 1040   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. 2012 1040 See Academic period , earlier. 2012 1040 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). 2012 1040 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). 2012 1040 In the following examples, assume that each student is an eligible student and each college or university an eligible educational institution. 2012 1040 Example 1. 2012 1040 Jackson is a sophomore in University V's degree program in dentistry. 2012 1040 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. 2012 1040 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. 2012 1040 Example 2. 2012 1040 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. 2012 1040 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. 2012 1040 Charles bought his books from a friend, so what he paid for them is not a qualified education expense. 2012 1040 Donna bought hers at College W's bookstore. 2012 1040 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. 2012 1040 Example 3. 2012 1040 When Marci enrolled at College X for her freshman year, she had to pay a separate student activity fee in addition to her tuition. 2012 1040 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. 2012 1040 No portion of the fee covers personal expenses. 2012 1040 Although labeled as a student activity fee, the fee is required for Marci's enrollment and attendance at College X. 2012 1040 Therefore, it is a qualified expense. 2012 1040 No Double Benefit Allowed You cannot do any of the following. 2012 1040 Deduct qualified education expenses you deduct under any other provision of the law, for example, as a business expense. 2012 1040 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. 2012 1040 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). 2012 1040 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. 2012 1040 See Coordination With Tuition and Fees Deduction in chapter 8, Qualified Tuition Program, later. 2012 1040 Deduct qualified education expenses that have been paid with tax-free interest on U. 2012 1040 S. 2012 1040 savings bonds (Form 8815). 2012 1040 See Figuring the Tax-Free Amount in chapter 10, Education Savings Bond Program, later. 2012 1040 Deduct qualified education expenses that have been paid with tax-free educational assistance, such as a scholarship, grant, or assistance provided by an employer. 2012 1040 See the following section on Adjustments to Qualified Education Expenses. 2012 1040 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. 2012 1040 The result is the amount of adjusted qualified education expenses for each student. 2012 1040 You must also reduce qualified education expenses by the other amounts referred to in No Double Benefit Allowed , earlier. 2012 1040 Tax-free educational assistance. 2012 1040   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. 2012 1040 See Academic period , earlier. 2012 1040   Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. 2012 1040 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). 2012 1040   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. 2012 1040 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. 2012 1040   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. 2012 1040 Generally, any scholarship or fellowship is treated as tax free. 2012 1040 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. 2012 1040 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. 2012 1040 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. 2012 1040 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. 2012 1040 For details, see Adjustments to Qualified Education Expenses in chapters 2 and 3. 2012 1040 Refunds. 2012 1040   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. 2012 1040 Some tax-free educational assistance received after 2013 may be treated as a refund. 2012 1040 See Tax-free educational assistance , earlier. 2012 1040 Refunds received in 2013. 2012 1040   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. 2012 1040 Refunds received after 2013 but before your income tax return is filed. 2012 1040   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. 2012 1040 Refunds received after 2013 and after your income tax return is filed. 2012 1040   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. 2012 1040 See Credit recapture , later. 2012 1040 Coordination with Coverdell education savings accounts and qualified tuition programs. 2012 1040   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). 2012 1040 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. 2012 1040 Credit recapture. 2012 1040    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. 2012 1040 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. 2012 1040 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). 2012 1040 Include that amount as an additional tax for the year the refund or tax-free assistance was received. 2012 1040 Example. 2012 1040   You paid $3,500 of qualified education expenses in December 2013, and your child began college in January 2014. 2012 1040 You claimed $3,500 as the tuition and fees deduction on your 2013 income tax return. 2012 1040 The reduction reduced your taxable income by $3,500. 2012 1040 Also, you claimed no tax credits in 2013. 2012 1040 Your child withdrew from two classes and you received a refund of $2,000 in 2014 after you filed your 2013 tax return. 2012 1040 Refigure your 2013 tuition and fees deduction using $1,500 of qualified education expense instead of the $3,500. 2012 1040 The refigured tuition and fees deduction is $1,500. 2012 1040 Do not file an amended 2013 tax return to account for this adjustment. 2012 1040 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. 2012 1040 You cannot file Form 1040A for 2014. 2012 1040 Amounts that do not reduce qualified education expenses. 2012 1040   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. 2012 1040   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. 2012 1040 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. 2012 1040 The use of the money is not restricted. 2012 1040 Example 1. 2012 1040 In 2013, Jackie paid $3,000 for tuition and $5,000 for room and board at University X. 2012 1040 The university did not require her to pay any fees in addition to her tuition in order to enroll in or attend classes. 2012 1040 To help pay these costs, she was awarded a $2,000 scholarship and a $4,000 student loan. 2012 1040 The terms of the scholarship state that it can be used to pay any of Jackie's college expenses. 2012 1040 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. 2012 1040 Jackie does not report any portion of the scholarship as income on her tax return. 2012 1040 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. 2012 1040 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. 2012 1040 Jackie is treated as having paid $1,000 in qualified education expenses ($3,000 tuition – $2,000 scholarship) in 2013. 2012 1040 Example 2. 2012 1040 The facts are the same as in Example 1, except that Jackie reports her entire scholarship as income on her tax return. 2012 1040 Because Jackie reported the entire $2,000 scholarship in her income, she does not need to reduce her qualified education expenses. 2012 1040 Jackie is treated as having paid $3,000 in qualified education expenses. 2012 1040 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. 2012 1040 This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. 2012 1040 Sports, games, hobbies, and noncredit courses. 2012 1040   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. 2012 1040 However, if the course of instruction or other education is part of the student's degree program, these expenses can qualify. 2012 1040 Comprehensive or bundled fees. 2012 1040   Some eligible educational institutions combine all of their fees for an academic period into one amount. 2012 1040 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. 2012 1040 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. 2012 1040 See Figuring the Deduction , later, for more information about Form 1098-T. 2012 1040 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). 2012 1040 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. 2012 1040 For you to be able to deduct qualified education expenses for your dependent, you must claim an exemption for that individual. 2012 1040 You do this by listing your dependent's name and other required information on Form 1040 (or Form 1040A), line 6c. 2012 1040 IF your dependent is an eligible student and you. 2012 1040 . 2012 1040 . 2012 1040 AND. 2012 1040 . 2012 1040 . 2012 1040 THEN. 2012 1040 . 2012 1040 . 2012 1040 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. 2012 1040 Your dependent cannot take a deduction. 2012 1040 claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. 2012 1040 do not claim an exemption for your dependent you paid all qualified education expenses no one is allowed to take a deduction. 2012 1040 do not claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. 2012 1040 Expenses paid by dependent. 2012 1040   If your dependent pays qualified education expenses, no one can take a tuition and fees deduction for those expenses. 2012 1040 Neither you nor your dependent can deduct the expenses. 2012 1040 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. 2012 1040 This rule applies even if you do not claim an exemption for your dependent on your tax return. 2012 1040 Expenses paid by you. 2012 1040   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. 2012 1040 Expenses paid under divorce decree. 2012 1040   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. 2012 1040 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. 2012 1040 Expenses paid by others. 2012 1040   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. 2012 1040 In this case, the student is treated as receiving the payment from the other person and, in turn, paying the institution. 2012 1040 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. 2012 1040 If the student is not a dependent, only the student can deduct payments made directly to the institution for his or her expenses. 2012 1040 If the student is your dependent, no one can deduct the payments. 2012 1040 Example. 2012 1040 In 2013, Ms. 2012 1040 Baker makes a payment directly to an eligible educational institution for her grandson Dan's qualified education expenses. 2012 1040 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. 2012 1040 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. 2012 1040 If someone else can claim an exemption for Dan, no one will be allowed a deduction for Ms. 2012 1040 Baker's payment. 2012 1040 Tuition reduction. 2012 1040   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. 2012 1040 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. 2012 1040 For more information on tuition reductions, see Qualified Tuition Reduction , in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. 2012 1040 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. 2012 1040 See Effect of the Amount of Your Income on the Amount of Your Deduction , later. 2012 1040 Form 1098-T. 2012 1040   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). 2012 1040 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. 2012 1040 An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. 2012 1040 However, the amount in boxes 1 and 2 of Form 1098-T might be different than what you paid. 2012 1040 When figuring the deduction, use only the amounts you paid in 2013 for qualified education expenses. 2012 1040   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. 2012 1040    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. 2012 1040 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. 2012 1040 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. 2012 1040 No tuition and fees deduction is allowed if your MAGI is larger than $80,000 ($160,000 if you are married filing jointly). 2012 1040 Modified adjusted gross income (MAGI). 2012 1040   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. 2012 1040 However, as discussed below, there may be other modifications. 2012 1040 MAGI when using Form 1040A. 2012 1040   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). 2012 1040 MAGI when using Form 1040. 2012 1040   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. 2012 1040   Table 6-2 shows how the amount of your MAGI can affect your tuition and fees deduction. 2012 1040   You can use Worksheet 6-1. 2012 1040 MAGI for the Tuition and Fees Deduction , later, to figure your MAGI. 2012 1040 Table 6-2. 2012 1040 Effect of MAGI on Maximum Tuition and Fees Deduction IF your filing status is. 2012 1040 . 2012 1040 . 2012 1040 AND your MAGI is. 2012 1040 . 2012 1040 . 2012 1040 THEN your maximum tuition and fees deduction is. 2012 1040 . 2012 1040 . 2012 1040 single,  head of household, or qualifying widow(er) not more than $65,000 $4,000. 2012 1040 more than $65,000  but not more than $80,000 $2,000. 2012 1040 more than $80,000 $0. 2012 1040 married filing joint return not more than $130,000 $4,000. 2012 1040 more than $130,000 but not more than $160,000 $2,000. 2012 1040 more than $160,000 $0. 2012 1040 Claiming the Deduction You claim a tuition and fees deduction by completing Form 8917 and submitting it with your Form 1040 or Form 1040A. 2012 1040 Enter the deduction on Form 1040, line 34, or Form 1040A, line 19. 2012 1040 A filled-in Form 8917 is shown at the end of this chapter. 2012 1040 Illustrated Example Tim Pfister, a single taxpayer, enrolled full-time at a local college to earn a degree in engineering. 2012 1040 This is the first year of his postsecondary education. 2012 1040 During 2013, he paid $3,600 for his qualified 2013 tuition expense. 2012 1040 Both he and the college meet all of the requirements for the tuition and fees deduction. 2012 1040 Tim's total income (Form 1040, line 22) and MAGI are $26,000. 2012 1040 He figures his deduction of $3,600 as shown on Form 8917, later. 2012 1040 Worksheet 6-1. 2012 1040 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. 2012 1040 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. 2012 1040 1. 2012 1040 Enter the amount from Form 1040, line 22   1. 2012 1040         2. 2012 1040 Enter the total from Form 1040, lines 23 through 33   2. 2012 1040               3. 2012 1040 Enter the total of any amounts entered on the dotted line next to Form 1040, line 36   3. 2012 1040               4. 2012 1040 Add lines 2 and 3   4. 2012 1040         5. 2012 1040 Subtract line 4 from line 1   5. 2012 1040         6. 2012 1040 Enter your foreign earned income exclusion and/or housing  exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   6. 2012 1040         7. 2012 1040 Enter your foreign housing deduction (Form 2555, line 50)   7. 2012 1040         8. 2012 1040 Enter the amount of income from Puerto Rico you are excluding   8. 2012 1040         9. 2012 1040 Enter the amount of income from American Samoa you are  excluding (Form 4563, line 15)   9. 2012 1040         10. 2012 1040 Add lines 5 through 9. 2012 1040 This is your modified adjusted gross income   10. 2012 1040     Note. 2012 1040 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. 2012 1040       This image is too large to be displayed in the current screen. 2012 1040 Please click the link to view the image. 2012 1040 Form 8917 for Tim Pfister Prev  Up  Next   Home   More Online 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The 2012 1040

2012 1040 Publication 80 - Introductory Material Table of Contents Future Developments What's New Reminders Calendar Future Developments For the latest information about developments related to Publication 80 (Circular SS), such as legislation enacted after it was published, go to www. 2012 1040 irs. 2012 1040 gov/pub80. 2012 1040 What's New Social security and Medicare tax for 2014. 2012 1040  The social security tax rate is 6. 2012 1040 2% each for the employee and employer, unchanged from 2013. 2012 1040 The social security wage base limit is $117,000. 2012 1040 The Medicare tax rate is 1. 2012 1040 45% each for the employee and employer, unchanged from 2013. 2012 1040 There is no wage base limit for Medicare tax. 2012 1040 Social security and Medicare taxes apply to the wages of household workers you pay $1,900 or more in cash or an equivalent form of compensation. 2012 1040 Social security and Medicare taxes apply to election workers who are paid $1,600 or more in cash or an equivalent form of compensation. 2012 1040 Change of responsible party. 2012 1040 . 2012 1040  Beginning January 1, 2014, any entity with an employer identification number (EIN) must file Form 8822-B, Change of Address or Responsible Party—Business, to report the latest change to its responsible party. 2012 1040 Form 8822-B must be filed within 60 days of the change. 2012 1040 If the change in the identity of your responsible party occurred before 2014, and you have not previously notified the IRS of the change, file Form 8822-B before March 1, 2014, reporting only the most recent change. 2012 1040 For a definition of “responsible party”, see the Form 8822-B instructions. 2012 1040 Same-sex marriage. 2012 1040  For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. 2012 1040 For more information, see Revenue Ruling 2013-17, 2013-38 I. 2012 1040 R. 2012 1040 B. 2012 1040 201, available at www. 2012 1040 irs. 2012 1040 gov/irb/2013-38_IRB/ar07. 2012 1040 html. 2012 1040 Notice 2013-61 provides special administrative procedures for employers to make claims for refund or adjustments of overpayments of social security and Medicare taxes with respect to certain same-sex spouse benefits before expiration of the period of limitations. 2012 1040 Notice 2013-61, 2013-44 I. 2012 1040 R. 2012 1040 B. 2012 1040 432, is available at www. 2012 1040 irs. 2012 1040 gov/irb/2013-44_IRB/ar10. 2012 1040 html. 2012 1040 Reminders Additional Medicare Tax withholding. 2012 1040  In addition to withholding Medicare tax at 1. 2012 1040 45%, you must withhold a 0. 2012 1040 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. 2012 1040 You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. 2012 1040 Additional Medicare Tax is only imposed on the employee. 2012 1040 There is no employer share of Additional Medicare Tax. 2012 1040 All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. 2012 1040 For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Employment and Payments , in section 12. 2012 1040 For more information on Additional Medicare Tax, visit IRS. 2012 1040 gov and enter “Additional Medicare Tax” in the search box. 2012 1040 Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans. 2012 1040  The work opportunity tax credit is available for eligible unemployed veterans who begin work on or after November 22, 2011, and before January 1, 2014. 2012 1040 Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. 2012 1040 For more information, visit IRS. 2012 1040 gov and enter “work opportunity tax credit” in the search box. 2012 1040 Outsourcing payroll duties. 2012 1040  Employers are responsible to ensure that tax returns are filed and deposits and payments are made, even if the employer contracts with a third party to perform these acts. 2012 1040 The employer remains responsible if the third party fails to perform any required action. 2012 1040 If you choose to outsource any of your payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer such as a payroll service provider or reporting agent, visit IRS. 2012 1040 gov and enter “outsourcing payroll duties” in the search box for helpful information on this topic. 2012 1040 Residents of the Philippines working in the Commonwealth of the Northern Mariana Islands (CNMI). 2012 1040  The IRS will not assert that an employer has understated liability for social security and Medicare taxes because they failed to treat services performed before January 1, 2015, in the CNMI by a resident of the Philippines as employment as defined under Internal Revenue Code section 3121(b). 2012 1040 For more information, see Announcement 2012-43, 2012-51 I. 2012 1040 R. 2012 1040 B. 2012 1040 723, available at www. 2012 1040 irs. 2012 1040 gov/irb/2012-51_IRB/ar15. 2012 1040 html. 2012 1040 CNMI government employees now subject to social security and Medicare taxes. 2012 1040  Beginning in the fourth calendar quarter of 2012, CNMI government employees are subject to social security and Medicare taxes. 2012 1040 COBRA premium assistance credit. 2012 1040  The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008 and May 31, 2010, and to premiums paid for up to 15 months. 2012 1040 See COBRA premium assistance credit in Publication 15 (Circular E), Employer's Tax Guide. 2012 1040 You can get Publication 15 (Circular E) at IRS. 2012 1040 gov. 2012 1040 You must receive written notice from the IRS to file Form 944. 2012 1040  If you have been filing Forms 941-SS and believe your employment taxes for the calendar year will be $1,000 or less, and you would like to file Form 944, Employer's ANNUAL Federal Tax Return, instead of Forms 941-SS, you must contact the IRS to request to file Form 944. 2012 1040 You must receive written notice from the IRS to file Form 944 instead of Forms 941-SS before you may file this form. 2012 1040 For more information on requesting to file Form 944 visit IRS. 2012 1040 gov and enter “file employment taxes annually” in the search box. 2012 1040 Federal employers in the CNMI. 2012 1040  The U. 2012 1040 S. 2012 1040 Treasury Department and the CNMI Division of Revenue and Taxation entered into an agreement under 5 USC 5517 in December 2006. 2012 1040 Under this agreement, all federal employers (including the Department of Defense) are required to withhold CNMI income taxes (rather than federal income taxes) and deposit the CNMI taxes with the CNMI Treasury for employees who are subject to CNMI taxes and whose regular place of federal employment is in the CNMI. 2012 1040 Federal employers are also required to file quarterly and annual reports with the CNMI Division of Revenue and Taxation. 2012 1040 For questions, contact the CNMI Division of Revenue and Taxation. 2012 1040 Change of address. 2012 1040  Use Form 8822-B to notify the IRS of an address change. 2012 1040 Do not mail Form 8822-B with your employment tax return. 2012 1040 Federal tax deposits must be made by electronic funds transfer. 2012 1040  You must use electronic funds transfer to make all federal tax deposits. 2012 1040 Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). 2012 1040 If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. 2012 1040 Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. 2012 1040 EFTPS is a free service provided by the Department of Treasury. 2012 1040 Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. 2012 1040 For more information on making federal tax deposits, see How To Deposit in section 8. 2012 1040 For more information about EFTPS or to enroll in EFTPS, visit the EFTPS website at www. 2012 1040 eftps. 2012 1040 gov or call 1-800-555-4477 (U. 2012 1040 S. 2012 1040 Virgin Islands only) or 303-967-5916 (toll call) or 1-800-733-4829 (TDD). 2012 1040 Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. 2012 1040 Electronic filing and payment. 2012 1040  Using electronic options can make filing a return and paying your federal tax easier. 2012 1040 Use the Electronic Federal Tax Payment System (EFTPS) to make deposits or pay in full, whether you rely on a tax professional or prepare your own taxes. 2012 1040 You can use IRS e-file to file certain returns. 2012 1040 If there is a balance due on the return, you can e-file and e-pay in a single step by authorizing an electronic funds withdrawal (EFW) from your bank account while e-filing. 2012 1040 Do not use EFW to pay taxes that are required to be deposited. 2012 1040 Visit the IRS website at www. 2012 1040 irs. 2012 1040 gov/efile for more information on filing electronically. 2012 1040 For more information on paying your taxes using EFW, visit the IRS website at www. 2012 1040 irs. 2012 1040 gov/e-pay. 2012 1040 A fee may be charged to file electronically. 2012 1040 For EFTPS, visit www. 2012 1040 eftps. 2012 1040 gov or call EFTPS Customer Service at 1-800-555-4477 (U. 2012 1040 S. 2012 1040 Virgin Islands only) or 303-967-5916 (toll call). 2012 1040 For electronic filing of Forms W-2AS, W-2CM, W-2GU, W-2VI, Wage and Tax Statements; W-3SS, Transmittal of Wage and Tax Statements; and W-2c, Corrected Wage and Tax Statement, visit www. 2012 1040 socialsecurity. 2012 1040 gov/employer. 2012 1040 If you are filing your tax return or paying your federal taxes electronically, a valid EIN is required. 2012 1040 If a valid EIN is not provided, the return or payment will not be processed. 2012 1040 This may result in penalties and delays in processing your return or payment. 2012 1040 Electronic option for filing Forms W-2AS, W-2CM, W-2GU, or W-2VI. 2012 1040  Employers in American Samoa, the CNMI, Guam, and the U. 2012 1040 S. 2012 1040 Virgin Islands can now use the Social Security Administration's W-2 Online service to create, save, print, and submit up to 50 Forms W-2AS, W-2CM, W-2GU, or W-2VI at a time over the Internet. 2012 1040 Form W-3SS will be generated automatically based on your Forms W-2AS, W-2CM, W-2GU, or W-2VI. 2012 1040 For more information, visit Social Security Administration's SSA website at www. 2012 1040 ssa. 2012 1040 gov/bso/bsowelcome. 2012 1040 htm. 2012 1040 Credit or debit card payments. 2012 1040  For information on paying your taxes with a credit or debit card, visit the IRS website at www. 2012 1040 irs. 2012 1040 gov/e-pay. 2012 1040 However, do not use credit or debit cards to make federal tax deposits. 2012 1040 Hiring new employees. 2012 1040  Record the number and name from each new employee's social security card. 2012 1040 An employee who does not have a social security card should apply for one on Form SS-5, Application for a Social Security Card. 2012 1040 See section 3. 2012 1040 Reporting discrepancies between Forms 941-SS (or Form 944) and Forms W-2. 2012 1040  File Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations, to explain certain wage, tax, and payment discrepancies between Forms 941-SS (or Form 944), and Forms W-2 that were caused by acquisitions, statutory mergers, or consolidations. 2012 1040 For more information, see the Instructions for Schedule D (Form 941). 2012 1040 Apply for an employer identification number (EIN) online. 2012 1040  You can apply for an EIN online by visiting IRS. 2012 1040 gov and clicking on the Apply for an EIN Online link under Tools. 2012 1040 Dishonored payments. 2012 1040  Any form of payment that is dishonored and returned from a financial institution is subject to a penalty. 2012 1040 The penalty is $25 or 2% of the payment, whichever is more. 2012 1040 However, the penalty on dishonored payments of $24. 2012 1040 99 or less is an amount equal to the payment. 2012 1040 For example, a dishonored payment of $18 is charged a penalty of $18. 2012 1040 Private delivery services. 2012 1040  You can use certain private delivery services designated by the IRS to send tax returns or payments. 2012 1040 The list includes only the following: DHL Express (DHL): DHL Same Day Service. 2012 1040 Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. 2012 1040 United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. 2012 1040 M. 2012 1040 , UPS Worldwide Express Plus, and UPS Worldwide Express. 2012 1040 For the IRS mailing address to use if you are using a private delivery service, go to IRS. 2012 1040 gov and enter “private delivery service” in the search box. 2012 1040 Your private delivery service can tell you how to get written proof of the mailing date. 2012 1040 Private delivery services cannot deliver items to P. 2012 1040 O. 2012 1040 boxes. 2012 1040 You must use the U. 2012 1040 S. 2012 1040 Postal Service to mail any item to an IRS P. 2012 1040 O. 2012 1040 box address. 2012 1040 Recordkeeping. 2012 1040  Keep all records of employment taxes for 4 years. 2012 1040 These should be available for IRS review. 2012 1040 There is no required format for such records, but they should include your EIN; the amounts and dates of all wage payments (including fringe benefits) and tips reported; the names, addresses, and occupations of employees receiving such payments and their social security numbers; copies of returns filed; dates of employment; and the dates and amounts of deposits made. 2012 1040 Farm employers must keep a record of the name, permanent address, and EIN of each crew leader. 2012 1040 See Farm Crew Leaders in section 2. 2012 1040 Disregarded entities and qualified subchapter S subsidiaries (QSubs). 2012 1040  Eligible single-owner disregarded entities and QSubs are treated as separate entities for employment tax purposes. 2012 1040 Eligible single-member entities that have not elected to be taxed as corporations must report and pay employment taxes on wages paid to their employees using the entities' own names and EINs. 2012 1040 See Regulations sections 1. 2012 1040 1361-4(a)(7) and 301. 2012 1040 7701-2(c)(2)(iv). 2012 1040 Photographs of missing children. 2012 1040  The IRS is a proud partner with the National Center for Missing and Exploited Children. 2012 1040 Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 2012 1040 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. 2012 1040 Calendar   If any date for filing a return, furnishing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. 2012 1040 A statewide legal holiday delays a filing due date only if the IRS office where you are required to file is located in that state. 2012 1040 However, a statewide legal holiday does not delay the due date of federal tax deposits. 2012 1040 See Deposits on Business Days Only in section 8. 2012 1040 For any filing due date, you will meet the “file” or “furnish” requirement if the envelope containing the return or form is properly addressed, contains sufficient postage, and is postmarked by the U. 2012 1040 S. 2012 1040 Postal Service on or before the due date, or sent by an IRS-designated delivery service on or before the due date. 2012 1040 See Private delivery services under Reminders. 2012 1040 The following are important dates and responsibilities. 2012 1040 Also see Publication 509, Tax Calendars. 2012 1040 By January 31. 2012 1040   Furnish wage and tax statements to employees. 2012 1040 Give each employee a completed Form W-2AS, W-2CM, W-2GU, or W-2VI. 2012 1040 See section 10 for more information. 2012 1040 File Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, with the IRS. 2012 1040 If you deposited all Form 943 taxes when due, you have 10 additional calendar days to file. 2012 1040 U. 2012 1040 S. 2012 1040 Virgin Islands employers only must file Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, with the IRS. 2012 1040 Pay or deposit (if more than $500) any balance of the tax due. 2012 1040 If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. 2012 1040 File Form 944 with the IRS if you were notified by the IRS to file Form 944 instead of quarterly Forms 941-SS. 2012 1040 If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. 2012 1040 By February 28. 2012 1040  File paper wage and tax statements with the Social Security Administration (SSA). 2012 1040 File Copy A of Forms W-2AS, W-2CM, W-2GU, or W-2VI, and Form W-3SS with the Social Security Administration (SSA). 2012 1040 For electronically filed returns, see By March 31 next. 2012 1040 By March 31. 2012 1040  File electronic Forms W-2AS, W-2CM, W-2GU, or W-2VI with the SSA. 2012 1040 Visit the SSA's Reporting Instructions & Information webpage at www. 2012 1040 socialsecurity. 2012 1040 gov/employer for more information. 2012 1040 By April 30, July 31, October 31, and January 31. 2012 1040  File Form 941-SS with the IRS. 2012 1040 If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. 2012 1040 Do not file Forms 941-SS for these quarters if you have been notified to file Form 944 and you did not request to file quarterly Forms 941-SS. 2012 1040 Deposit FUTA tax for the quarter (including any amount carried over from other quarters) if over $500. 2012 1040 If $500 or less, carry it over to the next quarter. 2012 1040 See section 11 for more information. 2012 1040 Prev  Up  Next   Home   More Online Publications