Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

2014 State Tax Forms

How To Amend Previous Tax Returns2012 Federal 1040 Tax Forms2011 Tax Form 1040ezFind State Tax FormsTax Form 1040x Amended ReturnFile Free State TaxesHow To File Student TaxesEz Form 1040Free Income Tax HelpFiling State Taxes FreeTax Extension 2011Irs Gov Forms1040xHow To File An Amended Tax Return For 2013H & R Block Online TaxesFree Tax Filing 2012 OnlineH&r Block Free File 2011Amend Federal Tax Return1040 ComFree 2012 Tax Filing OnlineTax Forms 1040Free State Tax Return EfileHow To Fill Out 1040xTax Act 20112013 Form 1040ezHow To Amend Your Tax ReturnHrblock Free File1040x Amendment Form1040ez Amended FormTax Form 1040ez InstructionsH&r Block At HomeMyfreetaxes Com RochestercashWww Aarp Org TaxaideTax Planning Us Back Taxes1040 Ez FormFree File State ReturnSchool Tax FormsHow To Fill 1040nr Ez FormE File State TaxAmended Tax Return Form 2012Free Taxes For Military

2014 State Tax Forms

2014 state tax forms 3. 2014 state tax forms   Adjustments to Income Table of Contents Individual Retirement Arrangement (IRA) Contributions and DeductionsContributions to Kay Bailey Hutchison Spousal IRAs. 2014 state tax forms Deductible contribution. 2014 state tax forms Nondeductible contribution. 2014 state tax forms You may be able to subtract amounts from your total income (Form 1040, line 22 or Form 1040A, line 15) or total effectively connected income (Form 1040NR, line 23) to get your adjusted gross income (Form 1040, line 37; Form 1040A, line 21; or Form 1040NR, line 36). 2014 state tax forms Some adjustments to income follow. 2014 state tax forms Contributions to your individual retirement arrangement (IRA) (Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32), explained later in this publication. 2014 state tax forms Certain moving expenses (Form 1040, line 26; or Form 1040NR, line 26) if you changed job locations or started a new job in 2013. 2014 state tax forms See Publication 521, Moving Expenses, or see Form 3903, Moving Expenses, and its instructions. 2014 state tax forms Some health insurance costs (Form 1040, line 29 or Form 1040NR, line 29) if you were self-employed and had a net profit for the year, or if you received wages in 2013 from an S corporation in which you were a more-than-2% shareholder. 2014 state tax forms For more details, see Publication 535, Business Expenses. 2014 state tax forms Payments to your self-employed SEP, SIMPLE, or qualified plan (Form 1040, line 28 or Form 1040NR, line 28). 2014 state tax forms For more information, including limits on how much you can deduct, see Publication 560, Retirement Plans for Small Business. 2014 state tax forms Penalties paid on early withdrawal of savings (Form 1040, line 30 or Form 1040NR, line 30). 2014 state tax forms Form 1099-INT, Interest Income, or Form 1099-OID, Original Issue Discount, will show the amount of any penalty you were charged. 2014 state tax forms Alimony payments (Form 1040, line 31a). 2014 state tax forms For more information, see Publication 504, Divorced or Separated Individuals. 2014 state tax forms There are other items you can claim as adjustments to income. 2014 state tax forms These adjustments are discussed in your tax return instructions. 2014 state tax forms Individual Retirement Arrangement (IRA) Contributions and Deductions This section explains the tax treatment of amounts you pay into traditional IRAs. 2014 state tax forms A traditional IRA is any IRA that is not a Roth or SIMPLE IRA. 2014 state tax forms Roth and SIMPLE IRAs are defined earlier in the IRA discussion under Retirement Plan Distributions . 2014 state tax forms For more detailed information, see Publication 590. 2014 state tax forms Contributions. 2014 state tax forms   An IRA is a personal savings plan that offers you tax advantages to set aside money for your retirement. 2014 state tax forms Two advantages of a traditional IRA are: You may be able to deduct some or all of your contributions to it, depending on your circumstances, and Generally, amounts in your IRA, including earnings and gains, are not taxed until distributed. 2014 state tax forms    Although interest earned from your traditional IRA generally is not taxed in the year earned, it is not tax-exempt interest. 2014 state tax forms Do not report this interest on your tax return as tax-exempt interest. 2014 state tax forms General limit. 2014 state tax forms   The most that can be contributed for 2013 to your traditional IRA is the smaller of the following amounts. 2014 state tax forms Your taxable compensation for the year, or $5,500 ($6,500 if you were age 50 or older by the end of 2013). 2014 state tax forms Contributions to Kay Bailey Hutchison Spousal IRAs. 2014 state tax forms   In the case of a married couple filing a joint return for 2013, up to $5,500 ($6,500 for each spouse age 50 or older by the end of 2013) can be contributed to IRAs on behalf of each spouse, even if one spouse has little or no compensation. 2014 state tax forms For more information on the general limit and the Kay Bailey Hutchison Spousal IRA limit, see How Much Can Be Contributed? in Publication 590. 2014 state tax forms Deductible contribution. 2014 state tax forms   Generally, you can deduct the lesser of the contributions to your traditional IRA for the year or the general limit (or Kay Bailey Hutchison Spousal IRA limit, if applicable) just explained. 2014 state tax forms However, if you or your spouse was covered by an employer retirement plan at any time during the year for which contributions were made, you may not be able to deduct all of the contributions. 2014 state tax forms Your deduction may be reduced or eliminated, depending on your filing status and the amount of your income. 2014 state tax forms For more information, see Limit if Covered by Employer Plan in Publication 590. 2014 state tax forms Nondeductible contribution. 2014 state tax forms   The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. 2014 state tax forms You must file Form 8606, Nondeductible IRAs, to report nondeductible contributions even if you do not have to file a tax return for the year. 2014 state tax forms    For 2014, the most that can be contributed to your traditional IRA is $5,500 ($6,500 if you are age 50 or older at the end of 2014). 2014 state tax forms Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Tax Relief for Victims of Aug. 30 Wildfires in Texas

IRS e-File to Remain Open through Oct. 31 for Victims of Texas Wildfires

Updated 10/11/11 to include Navarro county.
Updated 9/29/11 to include Anderson, Caldwell, Fayette, Henderson, Hill and Rusk counties.
Updated 9/27/11 to include Harrison, Smith and Upshur counties.
Updated 9/20/11 to include Cass and Marion counties.
Updated 9/19/11 to include Gregg, Grimes, Montgomery, Walker and Waller counties.
Updated 9/15/11 to include Colorado, Houston, Leon, Travis and Williamson counties.

TX-2011-64, Sept. 12, 2011

HOUSTON — Victims of wildfires that began on Aug. 30, 2011 in parts of Texas may qualify for tax relief from the Internal Revenue Service.

The President has declared the following counties a federal disaster area: Anderson, Bastrop, Caldwell, Cass, Colorado, Fayette, Gregg, Grimes, Harrison, Henderson, Hill, Houston, Leon, Marion, Montgomery, Navarro, Rusk, Smith, Travis, Upshur, Walker, Waller and Williamson. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Aug. 30 and on or before Oct. 31 have been postponed to Oct. 31. This includes corporations and other businesses that previously obtained an extension until Sept. 15 to file their 2010 returns, and individuals and businesses that received a similar extension until Oct. 17. It also includes the estimated tax payment for the third quarter, normally due Sept. 15.

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Aug. 30 and on or before Sept. 14, 2011, as long as the deposits were made by Sept. 14, 2011.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Oct. 31 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Aug. 30 and on or before Oct. 31.

The IRS also gives affected taxpayers until Oct. 31 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Aug. 30 and on or before Oct. 31.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Aug. 30 and on or before Sept. 14 provided the taxpayer made these deposits by Sept. 14.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “Texas/Wildfires” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.

Related Information

Page Last Reviewed or Updated: 24-Mar-2014

The 2014 State Tax Forms

2014 state tax forms 4. 2014 state tax forms   Student Loan Interest Deduction Table of Contents Introduction Student Loan Interest DefinedQualified Student Loan Qualified Education Expenses Include As Interest Do Not Include As Interest When Must Interest Be Paid Can You Claim the DeductionNo Double Benefit Allowed Figuring the DeductionEffect of the Amount of Your Income on the Amount of Your Deduction Which Worksheet To Use Claiming the Deduction Introduction Generally, personal interest you pay, other than certain mortgage interest, is not deductible on your tax return. 2014 state tax forms However, if your modified adjusted gross income (MAGI) is less than $75,000 ($155,000 if filing a joint return) there is a special deduction allowed for paying interest on a student loan (also known as an education loan) used for higher education. 2014 state tax forms For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return before subtracting any deduction for student loan interest. 2014 state tax forms This deduction can reduce the amount of your income subject to tax by up to $2,500 in 2013. 2014 state tax forms The student loan interest deduction is taken as an adjustment to income. 2014 state tax forms This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). 2014 state tax forms This chapter explains: What type of loan interest you can deduct, Whether you can claim the deduction, What expenses you must have paid with the student loan, Who is an eligible student, How to figure the deduction, and How to claim the deduction. 2014 state tax forms Table 4-1. 2014 state tax forms Student Loan Interest Deduction at a Glance This table summarizes the features of the student loan interest deduction. 2014 state tax forms Do not rely on this table alone. 2014 state tax forms Refer to the text for complete details. 2014 state tax forms Feature   Description Maximum benefit   You can reduce your income subject to tax by up to $2,500. 2014 state tax forms Loan qualifications   Your student loan: •must have been taken out solely to pay qualified education expenses, and •cannot be from a related person or made under a qualified employer plan. 2014 state tax forms Student qualifications   The student must be: •you, your spouse, or your dependent, and  •enrolled at least half-time in a degree program. 2014 state tax forms Time limit on deduction   You can deduct interest paid during the remaining period of your student loan. 2014 state tax forms Limit on modified adjusted gross income (MAGI)   $155,000 if married filing a joint return; $75,000 if single, head of household, or qualifying widow(er). 2014 state tax forms Student Loan Interest Defined Student loan interest is interest you paid during the year on a qualified student loan. 2014 state tax forms It includes both required and voluntary interest payments. 2014 state tax forms Qualified Student Loan This is a loan you took out solely to pay qualified education expenses (defined later) that were: For you, your spouse, or a person who was your dependent when you took out the loan, Paid or incurred within a reasonable period of time before or after you took out the loan, and For education provided during an academic period for an eligible student. 2014 state tax forms Loans from the following sources are not qualified student loans. 2014 state tax forms A related person. 2014 state tax forms A qualified employer plan. 2014 state tax forms Your dependent. 2014 state tax forms   Generally, your dependent is someone who is either a: Qualifying child, or Qualifying relative. 2014 state tax forms You can find more information about dependents in Publication 501. 2014 state tax forms Exceptions. 2014 state tax forms   For purposes of the student loan interest deduction, there are the following exceptions to the general rules for dependents. 2014 state tax forms An individual can be your dependent even if you are the dependent of another taxpayer. 2014 state tax forms An individual can be your dependent even if the individual files a joint return with a spouse. 2014 state tax forms An individual can be your dependent even if the individual had gross income for the year that was equal to or more than the exemption amount for the year ($3,900 for 2013). 2014 state tax forms Reasonable period of time. 2014 state tax forms   Qualified education expenses are treated as paid or incurred within a reasonable period of time before or after you take out the loan if they are paid with the proceeds of student loans that are part of a federal postsecondary education loan program. 2014 state tax forms   Even if not paid with the proceeds of that type of loan, the expenses are treated as paid or incurred within a reasonable period of time if both of the following requirements are met. 2014 state tax forms The expenses relate to a specific academic period, and The loan proceeds are disbursed within a period that begins 90 days before the start of that academic period and ends 90 days after the end of that academic period. 2014 state tax forms   If neither of the above situations applies, the reasonable period of time usually is determined based on all the relevant facts and circumstances. 2014 state tax forms Academic period. 2014 state tax forms   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. 2014 state tax forms 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. 2014 state tax forms Eligible student. 2014 state tax forms   This is a student who was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. 2014 state tax forms Enrolled at least half-time. 2014 state tax forms   A student was enrolled at least half-time if the student was taking at least half the normal full-time work load for his or her course of study. 2014 state tax forms   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. 2014 state tax forms However, the standard may not be lower than any of those established by the U. 2014 state tax forms S. 2014 state tax forms Department of Education under the Higher Education Act of 1965. 2014 state tax forms Related person. 2014 state tax forms   You cannot deduct interest on a loan you get from a related person. 2014 state tax forms Related persons include: Your spouse, Your brothers and sisters, Your half brothers and half sisters, Your ancestors (parents, grandparents, etc. 2014 state tax forms ), Your lineal descendants (children, grandchildren, etc. 2014 state tax forms ), and Certain corporations, partnerships, trusts, and exempt organizations. 2014 state tax forms Qualified employer plan. 2014 state tax forms   You cannot deduct interest on a loan made under a qualified employer plan or under a contract purchased under such a plan. 2014 state tax forms Qualified Education Expenses For purposes of the student loan interest deduction, these expenses are the total costs of attending an eligible educational institution, including graduate school. 2014 state tax forms They include amounts paid for the following items. 2014 state tax forms Tuition and fees. 2014 state tax forms Room and board. 2014 state tax forms Books, supplies, and equipment. 2014 state tax forms Other necessary expenses (such as transportation). 2014 state tax forms The cost of room and board qualifies only to the extent that it is not more than the greater of: The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student, or The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. 2014 state tax forms Eligible educational institution. 2014 state tax forms   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. 2014 state tax forms S. 2014 state tax forms Department of Education. 2014 state tax forms It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. 2014 state tax forms   Certain educational institutions located outside the United States also participate in the U. 2014 state tax forms S. 2014 state tax forms Department of Education's Federal Student Aid (FSA) programs. 2014 state tax forms   For purposes of the student loan interest deduction, an eligible educational institution also includes an institution conducting an internship or residency program leading to a degree or certificate from an institution of higher education, a hospital, or a health care facility that offers postgraduate training. 2014 state tax forms   An educational institution must meet the above criteria only during the academic period(s) for which the student loan was incurred. 2014 state tax forms The deductibility of interest on the loan is not affected by the institution's subsequent loss of eligibility. 2014 state tax forms    The educational institution should be able to tell you if it is an eligible educational institution. 2014 state tax forms Adjustments to Qualified Education Expenses You must reduce your qualified education expenses by the total amount paid for them with the following tax-free items. 2014 state tax forms Employer-provided educational assistance. 2014 state tax forms See chapter 11, Employer-Provided Educational Assistance . 2014 state tax forms Tax-free distribution of earnings from a Coverdell education savings account (ESA). 2014 state tax forms See Tax-Free Distributions in chapter 7, Coverdell Education Savings Account. 2014 state tax forms Tax-free distribution of earnings from a qualified tuition program (QTP). 2014 state tax forms See Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program. 2014 state tax forms U. 2014 state tax forms S. 2014 state tax forms savings bond interest that you exclude from income because it is used to pay qualified education expenses. 2014 state tax forms See chapter 10, Education Savings Bond Program . 2014 state tax forms The tax-free part of scholarships and fellowships. 2014 state tax forms See Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. 2014 state tax forms Veterans' educational assistance. 2014 state tax forms See Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. 2014 state tax forms Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. 2014 state tax forms Include As Interest In addition to simple interest on the loan, if all other requirements are met, the items discussed below can be student loan interest. 2014 state tax forms Loan origination fee. 2014 state tax forms   In general, this is a one-time fee charged by the lender when a loan is made. 2014 state tax forms To be deductible as interest, a loan origination fee must be for the use of money rather than for property or services (such as commitment fees or processing costs) provided by the lender. 2014 state tax forms A loan origination fee treated as interest accrues over the term of the loan. 2014 state tax forms   Loan origination fees were not required to be reported on Form 1098-E, Student Loan Interest Statement, for loans made before September 1, 2004. 2014 state tax forms If loan origination fees are not included in the amount reported on your Form 1098-E, you can use any reasonable method to allocate the loan origination fees over the term of the loan. 2014 state tax forms The method shown in the example below allocates equal portions of the loan origination fee to each payment required under the terms of the loan. 2014 state tax forms A method that results in the double deduction of the same portion of a loan origination fee would not be reasonable. 2014 state tax forms Example. 2014 state tax forms In August 2004, Bill took out a student loan for $16,000 to pay the tuition for his senior year of college. 2014 state tax forms The lender charged a 3% loan origination fee ($480) that was withheld from the funds Bill received. 2014 state tax forms Bill began making payments on his student loan in 2013. 2014 state tax forms Because the loan origination fee was not included in his 2013 Form 1098-E, Bill can use any reasonable method to allocate that fee over the term of the loan. 2014 state tax forms Bill's loan is payable in 120 equal monthly payments. 2014 state tax forms He allocates the $480 fee equally over the total number of payments ($480 ÷ 120 months = $4 per month). 2014 state tax forms Bill made 7 payments in 2013, so he paid $28 ($4 × 7) of interest attributable to the loan origination fee. 2014 state tax forms To determine his student loan interest deduction, he will add the $28 to the amount of other interest reported to him on Form 1098-E. 2014 state tax forms Capitalized interest. 2014 state tax forms   This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. 2014 state tax forms Capitalized interest is treated as interest for tax purposes and is deductible as payments of principal are made on the loan. 2014 state tax forms No deduction for capitalized interest is allowed in a year in which no loan payments were made. 2014 state tax forms Interest on revolving lines of credit. 2014 state tax forms   This interest, which includes interest on credit card debt, is student loan interest if the borrower uses the line of credit (credit card) only to pay qualified education expenses. 2014 state tax forms See Qualified Education Expenses , earlier. 2014 state tax forms Interest on refinanced student loans. 2014 state tax forms   This includes interest on both: Consolidated loans—loans used to refinance more than one student loan of the same borrower, and Collapsed loans—two or more loans of the same borrower that are treated by both the lender and the borrower as one loan. 2014 state tax forms    If you refinance a qualified student loan for more than your original loan and you use the additional amount for any purpose other than qualified education expenses, you cannot deduct any interest paid on the refinanced loan. 2014 state tax forms Voluntary interest payments. 2014 state tax forms   These are payments made on a qualified student loan during a period when interest payments are not required, such as when the borrower has been granted a deferment or the loan has not yet entered repayment status. 2014 state tax forms Example. 2014 state tax forms The payments on Roger's student loan were scheduled to begin in June 2012, 6 months after he graduated from college. 2014 state tax forms He began making payments as required. 2014 state tax forms In September 2013, Roger enrolled in graduate school on a full-time basis. 2014 state tax forms He applied for and was granted deferment of his loan payments while in graduate school. 2014 state tax forms Wanting to pay down his student loan as much as possible, he made loan payments in October and November 2013. 2014 state tax forms Even though these were voluntary (not required) payments, Roger can deduct the interest paid in October and November. 2014 state tax forms Allocating Payments Between Interest and Principal The allocation of payments between interest and principal for tax purposes might not be the same as the allocation shown on the Form 1098-E or other statement you receive from the lender or loan servicer. 2014 state tax forms To make the allocation for tax purposes, a payment generally applies first to stated interest that remains unpaid as of the date the payment is due, second to any loan origination fees allocable to the payment, third to any capitalized interest that remains unpaid as of the date the payment is due, and fourth to the outstanding principal. 2014 state tax forms Example. 2014 state tax forms In August 2012, Peg took out a $10,000 student loan to pay the tuition for her senior year of college. 2014 state tax forms The lender charged a 3% loan origination fee ($300) that was withheld from the funds Peg received. 2014 state tax forms The interest (5% simple) on this loan accrued while she completed her senior year and for 6 months after she graduated. 2014 state tax forms At the end of that period, the lender determined the amount to be repaid by capitalizing all accrued but unpaid interest ($625 interest accrued from August 2012 through October 2013) and adding it to the outstanding principal balance of the loan. 2014 state tax forms The loan is payable over 60 months, with a payment of $200. 2014 state tax forms 51 due on the first of each month, beginning November 2013. 2014 state tax forms Peg did not receive a Form 1098-E for 2013 from her lender because the amount of interest she paid did not require the lender to issue an information return. 2014 state tax forms However, she did receive an account statement from the lender that showed the following 2013 payments on her outstanding loan of $10,625 ($10,000 principal + $625 accrued but unpaid interest). 2014 state tax forms Payment Date   Payment   Stated Interest   Principal November 2013   $200. 2014 state tax forms 51   $44. 2014 state tax forms 27   $156. 2014 state tax forms 24 December 2013   $200. 2014 state tax forms 51   $43. 2014 state tax forms 62   $156. 2014 state tax forms 89 Totals   $401. 2014 state tax forms 02   $87. 2014 state tax forms 89   $313. 2014 state tax forms 13 To determine the amount of interest that could be deducted on the loan for 2013, Peg starts with the total amount of stated interest she paid, $87. 2014 state tax forms 89. 2014 state tax forms Next, she allocates the loan origination fee over the term of the loan ($300 ÷ 60 months = $5 per month). 2014 state tax forms A total of $10 ($5 of each of the two principal payments) should be treated as interest for tax purposes. 2014 state tax forms Peg then applies the unpaid capitalized interest ($625) to the two principal payments in the order in which they were made, and determines that the remaining amount of principal of both payments is treated as interest for tax purposes. 2014 state tax forms Assuming that Peg qualifies to take the student loan interest deduction, she can deduct $401. 2014 state tax forms 02 ($87. 2014 state tax forms 89 + $10 + $303. 2014 state tax forms 13). 2014 state tax forms For 2014, Peg will continue to allocate $5 of the loan origination fee to the principal portion of each monthly payment she makes and treat that amount as interest for tax purposes. 2014 state tax forms She also will apply the remaining amount of capitalized interest ($625 − $303. 2014 state tax forms 13 = $321. 2014 state tax forms 87) to the principal payments in the order in which they are made until the balance is zero, and treat those amounts as interest for tax purposes. 2014 state tax forms Do Not Include As Interest You cannot claim a student loan interest deduction for any of the following items. 2014 state tax forms Interest you paid on a loan if, under the terms of the loan, you are not legally obligated to make interest payments. 2014 state tax forms Loan origination fees that are payments for property or services provided by the lender, such as commitment fees or processing costs. 2014 state tax forms Interest you paid on a loan to the extent payments were made through your participation in the National Health Service Corps Loan Repayment Program (the “NHSC Loan Repayment Program”) or certain other loan repayment assistance programs. 2014 state tax forms For more information, see Student Loan Repayment Assistance in chapter 5, Student Loan Cancellations and Repayment Assistance. 2014 state tax forms When Must Interest Be Paid You can deduct all interest you paid during the year on your student loan, including voluntary payments, until the loan is paid off. 2014 state tax forms Can You Claim the Deduction Generally, you can claim the deduction if all of the following requirements are met. 2014 state tax forms Your filing status is any filing status except married filing separately. 2014 state tax forms No one else is claiming an exemption for you on his or her tax return. 2014 state tax forms You are legally obligated to pay interest on a qualified student loan. 2014 state tax forms You paid interest on a qualified student loan. 2014 state tax forms Claiming an exemption for you. 2014 state tax forms   Another taxpayer is claiming an exemption for you if he or she lists your name and other required information on his or her Form 1040 (or Form 1040A), line 6c, or Form 1040NR, line 7c. 2014 state tax forms Example 1. 2014 state tax forms During 2013, Josh paid $600 interest on his qualified student loan. 2014 state tax forms Only he is legally obligated to make the payments. 2014 state tax forms No one claimed an exemption for Josh for 2013. 2014 state tax forms Assuming all other requirements are met, Josh can deduct the $600 of interest he paid on his 2013 Form 1040 or 1040A. 2014 state tax forms Example 2. 2014 state tax forms During 2013, Jo paid $1,100 interest on her qualified student loan. 2014 state tax forms Only she is legally obligated to make the payments. 2014 state tax forms Jo's parents claimed an exemption for her on their 2013 tax return. 2014 state tax forms In this case, neither Jo nor her parents may deduct the student loan interest Jo paid in 2013. 2014 state tax forms Interest paid by others. 2014 state tax forms   If you are the person legally obligated to make interest payments and someone else makes a payment of interest on your behalf, you are treated as receiving the payments from the other person and, in turn, paying the interest. 2014 state tax forms Example 1. 2014 state tax forms Darla obtained a qualified student loan to attend college. 2014 state tax forms After Darla's graduation from college, she worked as an intern for a nonprofit organization. 2014 state tax forms As part of the internship program, the nonprofit organization made an interest payment on behalf of Darla. 2014 state tax forms This payment was treated as additional compensation and reported in box 1 of her Form W-2. 2014 state tax forms Assuming all other qualifications are met, Darla can deduct this payment of interest on her tax return. 2014 state tax forms Example 2. 2014 state tax forms Ethan obtained a qualified student loan to attend college. 2014 state tax forms After graduating from college, the first monthly payment on his loan was due in December. 2014 state tax forms As a gift, Ethan's mother made this payment for him. 2014 state tax forms No one is claiming a dependency exemption for Ethan on his or her tax return. 2014 state tax forms Assuming all other qualifications are met, Ethan can deduct this payment of interest on his tax return. 2014 state tax forms No Double Benefit Allowed You cannot deduct as interest on a student loan any amount that is an allowable deduction under any other provision of the tax law (for example, as home mortgage interest). 2014 state tax forms Figuring the Deduction Your student loan interest deduction for 2013 is generally the smaller of: $2,500, or The interest you paid in 2013. 2014 state tax forms However, the amount determined above may be gradually reduced (phased out) or eliminated based on your filing status and MAGI as explained below. 2014 state tax forms You can use Worksheet 4-1. 2014 state tax forms Student Loan Interest Deduction Worksheet (at the end of this chapter) to figure both your MAGI and your deduction. 2014 state tax forms Form 1098-E. 2014 state tax forms   To help you figure your student loan interest deduction, you should receive Form 1098-E. 2014 state tax forms Generally, an institution (such as a bank or governmental agency) that received interest payments of $600 or more during 2013 on one or more qualified student loans must send Form 1098-E (or acceptable substitute) to each borrower by January 31, 2014. 2014 state tax forms   For qualified student loans taken out before September 1, 2004, the institution is required to include on Form 1098-E only payments of stated interest. 2014 state tax forms Other interest payments, such as certain loan origination fees and capitalized interest, may not appear on the form you receive. 2014 state tax forms However, if you pay qualifying interest that is not included on Form 1098-E, you can also deduct those amounts. 2014 state tax forms See Allocating Payments Between Interest and Principal , earlier. 2014 state tax forms    The lender may ask for a completed Form W-9S, or similar statement to obtain the borrower's name, address, and taxpayer identification number. 2014 state tax forms The form may also be used by the borrower to certify that the student loan was incurred solely to pay for qualified education expenses. 2014 state tax forms Effect of the Amount of Your Income on the Amount of Your Deduction The amount of your student loan interest deduction is phased out (gradually reduced) if your MAGI is between $60,000 and $75,000 ($125,000 and $155,000 if you file a joint return). 2014 state tax forms You cannot take a student loan interest deduction if your MAGI is $75,000 or more ($155,000 or more if you file a joint return). 2014 state tax forms Modified adjusted gross income (MAGI). 2014 state tax forms   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return before subtracting any deduction for student loan interest. 2014 state tax forms However, as discussed below, there may be other modifications. 2014 state tax forms Table 4-2 shows how the amount of your MAGI can affect your student loan interest deduction. 2014 state tax forms Table 4-2. 2014 state tax forms Effect of MAGI on Student Loan Interest Deduction IF your filing status is. 2014 state tax forms . 2014 state tax forms . 2014 state tax forms AND your MAGI is. 2014 state tax forms . 2014 state tax forms . 2014 state tax forms THEN your student loan interest deduction is. 2014 state tax forms . 2014 state tax forms . 2014 state tax forms single,  head of household, or qualifying widow(er) not more than $60,000 not affected by the phaseout. 2014 state tax forms more than $60,000  but less than $75,000 reduced because of the phaseout. 2014 state tax forms $75,000 or more eliminated by the phaseout. 2014 state tax forms married filing joint return not more than $125,000 not affected by the phaseout. 2014 state tax forms more than $125,000 but less than $155,000 reduced because of the phaseout. 2014 state tax forms $155,000 or more eliminated by the phaseout. 2014 state tax forms MAGI when using Form 1040A. 2014 state tax forms   If you file Form 1040A, your MAGI is the AGI on line 22 of that form figured without taking into account any amount on line 18 (student loan interest deduction) and line 19 (tuition and fees deduction). 2014 state tax forms MAGI when using Form 1040. 2014 state tax forms   If you file Form 1040, your MAGI is the AGI on line 38 of that form figured without taking into account any amount on line 33 (student loan interest deduction), line 34 (tuition and fees deduction), or line 35 (domestic production activities deduction), and modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. 2014 state tax forms MAGI when using Form 1040NR. 2014 state tax forms   If you file Form 1040NR, your MAGI is the AGI on line 36 of that form figured without taking into account any amount on line 33 (student loan interest deduction) and line 34 (domestic production activities deduction). 2014 state tax forms MAGI when using Form 1040NR-EZ. 2014 state tax forms   If you file Form 1040NR-EZ, your MAGI is the AGI on line 10 of that form figured without taking into account any amount on line 9 (student loan interest deduction). 2014 state tax forms Phaseout. 2014 state tax forms   If your MAGI is within the range of incomes where the credit must be reduced, you must figure your reduced deduction. 2014 state tax forms To figure the phaseout, multiply your interest deduction (before the phaseout) by a fraction. 2014 state tax forms The numerator is your MAGI minus $60,000 ($125,000 in the case of a joint return). 2014 state tax forms The denominator is $15,000 ($30,000 in the case of a joint return). 2014 state tax forms Subtract the result from your deduction (before the phaseout) to give you the amount you can deduct. 2014 state tax forms Example 1. 2014 state tax forms During 2013 you paid $800 interest on a qualified student loan. 2014 state tax forms Your 2013 MAGI is $145,000 and you are filing a joint return. 2014 state tax forms You must reduce your deduction by $533, figured as follows. 2014 state tax forms   $800 × $145,000 − $125,000  $30,000 = $533   Your reduced student loan interest deduction is $267 ($800 − $533). 2014 state tax forms Example 2. 2014 state tax forms The facts are the same as in Example 1 except that you paid $2,750 interest. 2014 state tax forms Your maximum deduction for 2013 is $2,500. 2014 state tax forms You must reduce your maximum deduction by $1,667, figured as follows. 2014 state tax forms   $2,500 × $145,000 − $125,000  $30,000 = $1,667   In this example, your reduced student loan interest deduction is $833 ($2,500 − $1,667). 2014 state tax forms Which Worksheet To Use Generally, you figure the deduction using the Student Loan Interest Deduction Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR. 2014 state tax forms However, if you are filing Form 2555, Foreign Earned Income, Form 2555-EZ, Foreign Earned Income Exclusion, or Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa, or you are excluding income from sources within Puerto Rico, you must complete Worksheet 4-1. 2014 state tax forms Student Loan Interest Deduction Worksheet at the end of this chapter. 2014 state tax forms Claiming the Deduction The student loan interest deduction is an adjustment to income. 2014 state tax forms To claim the deduction, enter the allowable amount on line 33 (Form 1040), line 18 (Form 1040A), line 33 (Form 1040NR), or line 9 (Form 1040NR-EZ). 2014 state tax forms Worksheet 4-1. 2014 state tax forms Student Loan Interest Deduction Worksheet Use this worksheet instead of the worksheet in the Form 1040 instructions if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico. 2014 state tax forms Before using this worksheet, you must complete Form 1040, lines 7 through 32, plus any amount to be entered on the dotted line next to line 36. 2014 state tax forms 1. 2014 state tax forms Enter the total interest you paid in 2013 on qualified student loans. 2014 state tax forms Do not enter  more than $2,500 1. 2014 state tax forms   2. 2014 state tax forms Enter the amount from Form 1040, line 22 2. 2014 state tax forms       3. 2014 state tax forms Enter the total of the amounts from Form 1040,  lines 23 through 32 3. 2014 state tax forms           4. 2014 state tax forms Enter the total of any amounts entered on the dotted line next to Form 1040, line 36 4. 2014 state tax forms           5. 2014 state tax forms Add lines 3 and 4 5. 2014 state tax forms       6. 2014 state tax forms Subtract line 5 from line 2 6. 2014 state tax forms       7. 2014 state tax forms Enter any foreign earned income exclusion and/or housing  exclusion (Form 2555, line 45, or Form 2555-EZ, line 18) 7. 2014 state tax forms       8. 2014 state tax forms Enter any foreign housing deduction (Form 2555, line 50) 8. 2014 state tax forms       9. 2014 state tax forms Enter the amount of income from Puerto Rico you are excluding 9. 2014 state tax forms       10. 2014 state tax forms Enter the amount of income from American Samoa  you are excluding (Form 4563, line 15) 10. 2014 state tax forms       11. 2014 state tax forms Add lines 6 through 10. 2014 state tax forms This is your modified adjusted gross income 11. 2014 state tax forms   12. 2014 state tax forms Enter the amount shown below for your filing status 12. 2014 state tax forms     •Single, head of household, or qualifying widow(er)—$60,000       •Married filing jointly—$125,000     13. 2014 state tax forms Is the amount on line 11 more than the amount on line 12?       □ No. 2014 state tax forms Skip lines 13 and 14, enter -0- on line 15, and go to line 16. 2014 state tax forms       □ Yes. 2014 state tax forms Subtract line 12 from line 11 13. 2014 state tax forms   14. 2014 state tax forms Divide line 13 by $15,000 ($30,000 if married filing jointly). 2014 state tax forms Enter the result as a decimal  (rounded to at least three places). 2014 state tax forms If the result is 1. 2014 state tax forms 000 or more, enter 1. 2014 state tax forms 000 14. 2014 state tax forms . 2014 state tax forms 15. 2014 state tax forms Multiply line 1 by line 14 15. 2014 state tax forms   16. 2014 state tax forms Student loan interest deduction. 2014 state tax forms Subtract line 15 from line 1. 2014 state tax forms Enter the result here  and on Form 1040, line 33. 2014 state tax forms Do not include this amount in figuring any other  deduction on your return (such as on Schedule A, C, E, etc. 2014 state tax forms ) 16. 2014 state tax forms   Prev  Up  Next   Home   More Online Publications