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File taxes for free 19. File taxes for free   Education- Related Adjustments Table of Contents Introduction Useful Items - You may want to see: Student Loan Interest DeductionStudent Loan Interest Defined Can You Claim the Deduction How Much Can You Deduct How Do You Figure the Deduction Tuition and Fees DeductionCan You Claim the Deduction What Expenses Qualify Who Is an Eligible Student Who Can Claim a Dependent's Expenses How Much Can You Deduct Educator Expenses Introduction This chapter discusses the education-related adjustment you can deduct in figuring your adjusted gross income. File taxes for free This chapter covers the student loan interest deduction, tuition and fees deduction, and the deduction for educator expenses. File taxes for free Useful Items - You may want to see: Publication 970 Tax Benefits for Education Student Loan Interest Deduction Generally, personal interest you pay, other than certain mortgage interest, is not deductible on your tax return. File taxes for free 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. File taxes for free 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. File taxes for free This deduction can reduce the amount of your income subject to tax by up to $2,500 in 2013. File taxes for free Table 19-1 summarizes the features of the student loan interest deduction. File taxes for free Table 19-1. File taxes for free Student Loan Interest Deduction at a Glance Do not rely on this table alone. File taxes for free Refer to the text for more details. File taxes for free Feature Description Maximum benefit You can reduce your income subject to tax by up to $2,500. File taxes for free 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. File taxes for free Student qualifications The student must be: • you, your spouse, or your dependent, and   • enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential at an eligible educational institution. File taxes for free Time limit on deduction You can deduct interest paid during the remaining period of your student loan. File taxes for free Phaseout The amount of your deduction depends on your income level. File taxes for free Student Loan Interest Defined Student loan interest is interest you paid during the year on a qualified student loan. File taxes for free It includes both required and voluntary interest payments. File taxes for free 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 (defined in chapter 3) 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 when the student is an eligible student. File taxes for free Loans from the following sources are not qualified student loans. File taxes for free A related person. File taxes for free A qualified employer plan. File taxes for free Exceptions. File taxes for free   For purposes of the student loan interest deduction, the following are exceptions to the general rules for dependents. File taxes for free An individual can be your dependent even if you are the dependent of another taxpayer. File taxes for free An individual can be your dependent even if the individual files a joint return with a spouse. File taxes for free 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). File taxes for free    Reasonable period of time. File taxes for free   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. File taxes for free   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. File taxes for free The expenses relate to a specific academic period. File taxes for free 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. File taxes for free   If neither of the above situations applies, the reasonable period of time is determined based on all the relevant facts and circumstances. File taxes for free Academic period. File taxes for free   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. File taxes for free 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. File taxes for free Eligible student. File taxes for free   This is a student who was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. File taxes for free Enrolled at least half-time. File taxes for free   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. File taxes for free   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. File taxes for free However, the standard may not be lower than any of those established by the U. File taxes for free S. File taxes for free Department of Education under the Higher Education Act of 1965. File taxes for free Related person. File taxes for free   You cannot deduct interest on a loan you get from a related person. File taxes for free Related persons include: Your spouse, Your brothers and sisters, Your half brothers and half sisters, Your ancestors (parents, grandparents, etc. File taxes for free ), Your lineal descendants (children, grandchildren, etc. File taxes for free ), and Certain corporations, partnerships, trusts, and exempt organizations. File taxes for free Qualified employer plan. File taxes for free   You cannot deduct interest on a loan made under a qualified employer plan or under a contract purchased under such a plan. File taxes for free 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. File taxes for free They include amounts paid for the following items. File taxes for free Tuition and fees. File taxes for free Room and board. File taxes for free Books, supplies, and equipment. File taxes for free Other necessary expenses (such as transportation). File taxes for free The cost of room and board qualifies only to the extent that it is not more than: 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 If greater, the actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. File taxes for free Eligible educational institution. File taxes for free   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. File taxes for free S. File taxes for free Department of Education. File taxes for free It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. File taxes for free   Certain educational institutions located outside the United States also participate in the U. File taxes for free S. File taxes for free Department of Education's Federal Student Aid (FSA) programs. File taxes for free   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. File taxes for free   An educational institution must meet the above criteria only during the academic period(s) for which the student loan was incurred. File taxes for free The deductibility of interest on the loan is not affected by the institution's subsequent loss of eligibility. File taxes for free    The educational institution should be able to tell you if it is an eligible educational institution. File taxes for free Adjustments to qualified education expenses. File taxes for free   You must reduce your qualified education expenses by certain tax-free items (such as the tax-free part of scholarships and fellowships). File taxes for free See chapter 4 of Publication 970 for details. File taxes for free Include as Interest In addition to simple interest on the loan, certain loan origination fees, capitalized interest, interest on revolving lines of credit, and interest on refinanced student loans can be student loan interest if all other requirements are met. File taxes for free Loan origination fee. File taxes for free   In general, this is a one-time fee charged by the lender when a loan is made. File taxes for free To be deductible as interest, the 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. File taxes for free A loan origination fee treated as interest accrues over the life of the loan. File taxes for free Capitalized interest. File taxes for free    This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. File taxes for free Interest on revolving lines of credit. File taxes for free   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. File taxes for free See Qualified Education Expenses , earlier. File taxes for free Interest on refinanced student loans. File taxes for free   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. File taxes for free 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. File taxes for free Voluntary interest payments. File taxes for free   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. File taxes for free Do Not Include as Interest You cannot claim a student loan interest deduction for any of the following items. File taxes for free Interest you paid on a loan if, under the terms of the loan, you are not legally obligated to make interest payments. File taxes for free Loan origination fees that are payments for property or services provided by the lender, such as commitment fees or processing costs. File taxes for free 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. File taxes for free For more information, see Student Loan Repayment Assistance in chapter 5 of Publication 970. File taxes for free Can You Claim the Deduction Generally, you can claim the deduction if all of the following requirements are met. File taxes for free Your filing status is any filing status except married filing separately. File taxes for free No one else is claiming an exemption for you on his or her tax return. File taxes for free You are legally obligated to pay interest on a qualified student loan. File taxes for free You paid interest on a qualified student loan. File taxes for free Interest paid by others. File taxes for free   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. File taxes for free See chapter 4 of Publication 970 for more information. File taxes for free 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, home mortgage interest). File taxes for free How Much Can You Deduct Your student loan interest deduction for 2013 is generally the smaller of: $2,500, or The interest you paid in 2013. File taxes for free However, the amount determined above 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). File taxes for free 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). File taxes for free For details on figuring your MAGI, see chapter 4 of Publication 970. File taxes for free How Do You Figure the Deduction Generally, you figure the deduction using the Student Loan Interest Deduction Worksheet in the Form 1040 or Form 1040A instructions. File taxes for free However, if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico, you must complete Worksheet 4-1 in chapter 4 of Publication 970. File taxes for free To help you figure your student loan interest deduction, you should receive Form 1098-E, Student Loan Interest Statement. File taxes for free 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. File taxes for free 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. File taxes for free Other interest payments, such as certain loan origination fees and capitalized interest, may not appear on the form you receive. File taxes for free However, if you pay qualifying interest that is not included on Form 1098-E, you can also deduct those amounts. File taxes for free For information on allocating payments between interest and principal, see chapter 4 of Publication 970. File taxes for free To claim the deduction, enter the allowable amount on Form 1040, line 33, or Form 1040A, line 18. File taxes for free Tuition and Fees Deduction You may be able to deduct qualified education expenses paid during the year for yourself, your spouse, or your dependent(s). File taxes for free 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. File taxes for free The qualified expenses must be for higher education, as explained later under What Expenses Qualify . File taxes for free The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. File taxes for free Table 19-2 summarizes the features of the tuition and fees deduction. File taxes for free You may be able to take a credit for your education expenses instead of a deduction. File taxes for free You can choose the one that will give you the lower tax. File taxes for free See chapter 35, Education Credits, for details about the credits. File taxes for free Can You Claim the Deduction The following rules will help you determine if you can claim the tuition and fees deduction. File taxes for free Who Can Claim the Deduction Generally, you can claim the tuition and fees deduction if all three of the following requirements are met. File taxes for free You paid qualified education expenses of higher education in 2013 for academic periods beginning in 2013 and those beginning in the first three months of 2014. File taxes for free You paid the education expenses for an eligible student. File taxes for free The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption (defined in chapter 3) on your tax return. File taxes for free Qualified education expenses are defined under What Expenses Qualify . File taxes for free Eligible students are defined later under Who Is an Eligible Student . File taxes for free Who Cannot Claim the Deduction You cannot claim the tuition and fees deduction if any of the following apply. File taxes for free Your filing status is married filing separately. File taxes for free Another person can claim an exemption for you as a dependent on his or her tax return. File taxes for free You cannot take the deduction even if the other person does not actually claim that exemption. File taxes for free Your modified adjusted gross income (MAGI) is more than $80,000 ($160,000 if filing a joint return). File taxes for free 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. File taxes for free More information on nonresident aliens can be found in Publication 519, U. File taxes for free S. File taxes for free Tax Guide for Aliens. File taxes for free You or anyone else claims an American opportunity or lifetime learning credit in 2013 with respect to expenses of the student for whom the qualified education expenses were paid. File taxes for free However, a state tax credit will not disqualify you from claiming a tuition and fees deduction. File taxes for free Table 19-2. File taxes for free Tuition and Fees Deduction at a Glance Do not rely on this table alone. File taxes for free Refer to the text for more details. File taxes for free Question   Answer What is the maximum benefit?   You can reduce your income subject to tax by up to $4,000. File taxes for free Where is the deduction taken?   As an adjustment to income on Form 1040, line 34, or Form 1040A, line 19. File taxes for free 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. File taxes for free 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. File taxes for free 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. File taxes for free 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 (defined earlier under Student Loan Interest Deduction ) beginning in 2013 or in the first 3 months of 2014. File taxes for free Payments with borrowed funds. File taxes for free   You can claim a tuition and fees deduction for qualified education expenses paid with the proceeds of a loan. File taxes for free 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. File taxes for free Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. File taxes for free Student withdraws from class(es). File taxes for free   You can claim a tuition and fees deduction for qualified education expenses not refunded when a student withdraws. File taxes for free 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. File taxes for free Eligible educational institution. File taxes for free   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. File taxes for free S. File taxes for free Department of Education. File taxes for free It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. File taxes for free The educational institution should be able to tell you if it is an eligible educational institution. File taxes for free   Certain educational institutions located outside the United States also participate in the U. File taxes for free S. File taxes for free Department of Education's Federal Student Aid (FSA) programs. File taxes for free Academic period. File taxes for free    An academic period is any quarter, semester, trimester, or any other period of study as reasonably determined by an eligible educational institution. File taxes for free If an eligible educational institution uses credit hours and does not have academic terms, each payment period may be treated as an academic period. File taxes for free Related expenses. File taxes for free   Student-activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses for the tuition and fees deduction only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance. File taxes for free Prepaid expenses. File taxes for free   Qualified education expenses paid in 2013 for an academic period that begins in the first three months of 2014 can be used in figuring the tuition and fees deduction. File taxes for free See Academic period, earlier. File taxes for free For example, if 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 the tuition and fees deduction for 2013 only if you meet all the other requirements. File taxes for free    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 tuition and fees deduction. File taxes for free No Double Benefit Allowed You cannot do any of the following. File taxes for free Deduct qualified education expenses you deduct under any other provision of the law, for example, as a business expense. File taxes for free 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. File taxes for free 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). File taxes for free 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. File taxes for free See Figuring the Taxable Portion of a Distribution in chapter 7 (Coverdell ESA) and chapter 8 (QTP) of Publication 970. File taxes for free Deduct qualified education expenses that have been paid with tax-free interest on U. File taxes for free S. File taxes for free savings bonds (Form 8815). File taxes for free See Figuring the Tax-Free Amount in chapter 10 of Publication 970. File taxes for free Deduct qualified education expenses that have been paid with tax-free educational assistance such as a scholarship, grant, or employer-provided educational assistance. File taxes for free See Adjustments to qualified education expenses, later. File taxes for free Adjustments to qualified education expenses. File taxes for free   For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. File taxes for free The result is the amount of adjusted qualified education expenses for each student. File taxes for free Tax-free educational assistance. File taxes for free   For tax-free educational assistance you received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance to that academic period. File taxes for free See Academic period, earlier. File taxes for free   This includes: The tax-free part of scholarships and fellowships, including Pell grants (see chapter 1 of Publication 970), The tax-free part of any employer-provided educational assistance (see chapter 11 of Publication 970), Veterans' educational assistance (see chapter 1 of Publication 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. File taxes for free Generally, any scholarship or fellowship you receive is treated as tax-free educational assistance. File taxes for free However, a scholarship or fellowship is not treated as tax-free educational assistance to the extent you include it in gross income (if you are required to file a tax return) for the year the scholarship or fellowship is received and either: 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 Pub. File taxes for free 970, chapter 1. File taxes for free 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 Pub. File taxes for free 970, chapter 1. File taxes for free You may be able to increase the combined value of your tuition and fees deduction and certain educational assistance if you include some or all of the educational assistance in income in the year it is received. File taxes for free For details, see Adjustments to Qualified Education Expenses in chapter 6 of Pub. File taxes for free 970. File taxes for free Some tax-free educational assistance received in 2013 may be treated as a refund of qualified education expenses paid in 2013. File taxes for free 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). File taxes for free 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. File taxes for free 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. File taxes for free Refunds. File taxes for free   A refund of qualified education expenses may reduce adjusted qualified education expenses for the tax year or may require you to include some or all of the refund in your gross income for the year the refund is received. File taxes for free See chapter 6 of Pub. File taxes for free 970 for more information. File taxes for free Some tax-free educational assistance received after 2013 may be treated as a refund. File taxes for free See Tax-free educational assistance, earlier. File taxes for free Refunds received in 2013. File taxes for free    For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses paid in 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. File taxes for free Refunds received after 2013 but before your income tax return is filed. File taxes for free   If you receive a refund after 2013 of qualified education expenses you paid in 2013 and the refund is received before you file your 2013 income tax return, reduce the amount of qualified education expenses for 2013 by the amount of the refund. File taxes for free Refunds received after 2013 and after your income tax return is filed. File taxes for free   If you receive a refund after 2013 of qualified education expenses you paid in 2013 and the refund is received after you file your 2013 income tax return, you may need to include some or all of the refund in your gross income for the year the refund is received. File taxes for free See chapter 6 of Pub. File taxes for free 970 for more information. File taxes for free Coordination with Coverdell education savings accounts and qualified tuition programs. File taxes for free    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). File taxes for free 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. File taxes for free Amounts that do not reduce qualified education expenses. File taxes for free   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. File taxes for free   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. File taxes for free 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. File taxes for free The use of the money is not restricted. File taxes for free 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. File taxes for free This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. File taxes for free Sports, games, hobbies, and noncredit courses. File taxes for free   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. File taxes for free However, if the course of instruction or other education is part of the student's degree program, these expenses can qualify. File taxes for free Comprehensive or bundled fees. File taxes for free   Some eligible educational institutions combine all of their fees for an academic period into one amount. File taxes for free 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. File taxes for free 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, Tuition Statement. File taxes for free See How Do You Figure the Deduction , later, for more information about Form 1098-T. File taxes for free 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 (defined earlier). File taxes for free 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. File taxes for free Table 19-3 summarizes who can claim the deduction. File taxes for free How Much Can You Deduct The maximum tuition and fees deduction in 2013 is $4,000, $2,000, or $0, depending on the amount of your MAGI. File taxes for free For details on figuring your MAGI, see chapter 6 of Publication 970. File taxes for free How Do You Figure the Deduction Figure the deduction using Form 8917. File taxes for free To help you figure your tuition and fees deduction, you should receive Form 1098-T, Tuition Statement. File taxes for free 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. File taxes for free To claim the deduction, enter the allowable amount on Form 1040, line 34, or Form 1040A, line 19, and attach your completed Form 8917. File taxes for free Table 19-3. File taxes for free Who Can Claim a Dependent's Expenses Do not rely on this table alone. File taxes for free See Who Can Claim a Dependent's Expenses in chapter 6 of Publication 970. File taxes for free IF your dependent is an eligible student and you. File taxes for free . File taxes for free . File taxes for free AND. File taxes for free . File taxes for free . File taxes for free THEN. File taxes for free . File taxes for free . File taxes for free 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. File taxes for free Your dependent cannot take a deduction. File taxes for free claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. File taxes for free do not claim an exemption for your dependent you paid all qualified education expenses no one is allowed to take a deduction. File taxes for free do not claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. File taxes for free Educator Expenses If you were an eligible educator in 2013, you can deduct on Form 1040, line 23, or Form 1040A, line 16, up to $250 of qualified expenses you paid in 2013. File taxes for free If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. File taxes for free However, neither spouse can deduct more than $250 of his or her qualified expenses on Form 1040, line 23, or Form 1040A, line 16. File taxes for free You may be able to deduct expenses that are more than the $250 (or $500) limit on Schedule A (Form 1040), line 21. File taxes for free Eligible educator. File taxes for free   An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide who worked in a school for at least 900 hours during a school year. File taxes for free Qualified expenses. File taxes for free   Qualified expenses include ordinary and necessary expenses paid in connection with books, supplies, equipment (including computer equipment, software, and services), and other materials used in the classroom. File taxes for free An ordinary expense is one that is common and accepted in your educational field. File taxes for free A necessary expense is one that is helpful and appropriate for your profession as an educator. File taxes for free An expense does not have to be required to be considered necessary. File taxes for free   Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. File taxes for free   You must reduce your qualified expenses by the following amounts. File taxes for free Excludable U. File taxes for free S. File taxes for free series EE and I savings bond interest from Form 8815. File taxes for free See Figuring the Tax-Free Amount in chapter 10 of Publication 970. File taxes for free Nontaxable qualified tuition program earnings or distributions. File taxes for free See Figuring the Taxable Portion of a Distribution in chapter 8 of Publication 970. File taxes for free Nontaxable distribution of earnings from a Coverdell education savings account. File taxes for free See Figuring the Taxable Portion of a Distribution in chapter 7 of Publication 970. File taxes for free Any reimbursements you received for these expenses that were not reported to you in box 1 of your Form W-2. File taxes for free Prev  Up  Next   Home   More Online Publications
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  • Disregard this notice if you have filed the return within the last four weeks using the same name and EIN listed on the notice.
  • Otherwise, file your required Form 990-T immediately according to the instructions on the notice.
    • If you don't think you need to file, complete the Response form enclosed with your notice and mail it to us using the envelope provided.
    • If you filed more than four weeks ago or used a different name or EIN, complete the Response form enclosed with your notice and mail it to us in the envelope provided along with a signed and dated copy of the return.

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Answers to Common Questions

Who must file a Form 990-T?
Form 990-T must be filed by any organization that is tax-exempt under section 501(a) or section 529(a), if it has gross unrelated business income of $1,000 or more for a given tax year. A list of other entities who must file Form 990-T is shown in the Who Must File section of the General Instructions of Form 990-T.

When is the Form 990-T due?
For an employees' trust defined in section 401(a), an IRA (including SEPs and SIMPLEs), a Roth IRA, a Coverdell ESA, or an Archer MSA, the Form 990-T is due by the 15th day of the 4th month after the end of its tax year. All other organizations must file Form 990-T by the 15th day of the 5th month after the end of their tax year. If any due date falls on a Saturday, Sunday, or legal holiday, the organization can file the return on the next business day.

Can I get help over the phone?
If you have questions and/or need help completing this form, please call 1-877-829-5500. Personal assistance is available Monday through Friday, 7:00 a.m. to 7:00 p.m. CT.

Where can I go for more information about tax-exempt organizations?
For more information on tax-exempt organizations see Tax Information for Charities & Other Non-Profits.


Tips for next year

Review the tax-exempt organization resources at Form 990 Resources and Tools for Exempt Organizations.


Understanding your notice

Reading your notice
Your notice may look different from the sample because the information contained in your notice is tailored to your situation.

Notice CP259D, Page 1

Notice CP259D, Page 2

Notice CP259D, Page 3

Notice CP259D, Page 4

Page Last Reviewed or Updated: 29-Mar-2014

The File Taxes For Free

File taxes for free Internal Revenue Bulletin:  2010-9  March 1, 2010  Rev. File taxes for free Proc. File taxes for free 2010-18 Table of Contents SECTION 1. File taxes for free PURPOSE SECTION 2. File taxes for free BACKGROUND SECTION 3. File taxes for free SCOPE SECTION 4. File taxes for free APPLICATION SECTION 5. File taxes for free EFFECTIVE DATE SECTION 6. File taxes for free DRAFTING INFORMATION SECTION 1. File taxes for free PURPOSE This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2010, including a separate table of limitations on depreciation deductions for trucks and vans; and (2) the amounts to be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2010, including a separate table of inclusion amounts for lessees of trucks and vans. File taxes for free The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code. File taxes for free SECTION 2. File taxes for free BACKGROUND . File taxes for free 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year the taxpayer places the passenger automobile in service and for each succeeding year. File taxes for free Section 280F(d)(7) requires the amounts allowable as depreciation deductions to be increased by a price inflation adjustment amount for passenger automobiles placed in service after 1988. File taxes for free The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. File taxes for free This change reflects the higher rate of price inflation for trucks and vans since 1988. File taxes for free . File taxes for free 02 Section 280F(c) requires a reduction in the deduction allowed to the lessee of a leased passenger automobile. File taxes for free The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. File taxes for free Under § 1. File taxes for free 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an inclusion amount determined by applying a formula to the amount obtained from a table. File taxes for free One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. File taxes for free Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. File taxes for free SECTION 3. File taxes for free SCOPE . File taxes for free 01 The limitations on depreciation deductions in section 4. File taxes for free 01(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2010, and continue to apply for each taxable year that the passenger automobile remains in service. File taxes for free . File taxes for free 02 The tables in section 4. File taxes for free 02 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2010. File taxes for free Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. File taxes for free See Rev. File taxes for free Proc. File taxes for free 2005-13, 2005-1 C. File taxes for free B. File taxes for free 759, for passenger automobiles first leased before calendar year 2006; Rev. File taxes for free Proc. File taxes for free 2006-18, 2006-1 C. File taxes for free B. File taxes for free 645, for passenger automobiles first leased during calendar year 2006; Rev. File taxes for free Proc. File taxes for free 2007-30, 2007-1 C. File taxes for free B. File taxes for free 1104, for passenger automobiles first leased during calendar year 2007; Rev. File taxes for free Proc. File taxes for free 2008-22, 2008-12 I. File taxes for free R. File taxes for free B. File taxes for free 658, for passenger automobiles first leased during calendar year 2008; and Rev. File taxes for free Proc. File taxes for free 2009-24, 2009-17 I. File taxes for free R. File taxes for free B. File taxes for free 885, for passenger automobiles first leased during calendar year 2009. File taxes for free SECTION 4. File taxes for free APPLICATION . File taxes for free 01 Limitations on Depreciation Deductions for Certain Automobiles. File taxes for free (1) Amount of the inflation adjustment. File taxes for free (a) Passenger automobiles (other than trucks or vans). File taxes for free Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. File taxes for free The term “CPI automobile component” is defined in § 280F(d)(7)(B)(ii) as the “automobile component” of the Consumer Price Index for all Urban Consumers published by the Department of Labor. File taxes for free The new car component of the CPI was 115. File taxes for free 2 for October 1987 and 137. File taxes for free 851 for October 2009. File taxes for free The October 2009 index exceeded the October 1987 index by 22. File taxes for free 651. File taxes for free Therefore, the automobile price inflation adjustment for 2010 for passenger automobiles (other than trucks and vans) is 19. File taxes for free 66 percent (22. File taxes for free 651/115. File taxes for free 2 x 100%). File taxes for free The dollar limitations in § 280F(a) are multiplied by a factor of 0. File taxes for free 1966, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2010. File taxes for free This adjustment applies to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2010. File taxes for free (b) Trucks and vans. File taxes for free To determine the dollar limitations for trucks and vans first placed in service during calendar year 2010, the new truck component of the CPI is used instead of the new car component. File taxes for free The new truck component of the CPI was 112. File taxes for free 4 for October 1987 and 140. File taxes for free 897 for October 2009. File taxes for free The October 2009 index exceeded the October 1987 index by 28. File taxes for free 497. File taxes for free Therefore, the automobile price inflation adjustment for 2010 for trucks and vans is 25. File taxes for free 35 percent (28. File taxes for free 497/112. File taxes for free 4 x 100%). File taxes for free The dollar limitations in § 280F(a) are multiplied by a factor of 0. File taxes for free 2535, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations for trucks and vans. File taxes for free This adjustment applies to all trucks and vans that are first placed in service in calendar year 2010. File taxes for free (2) Amount of the limitation. File taxes for free Tables 1 and 2 contain the dollar amount of the depreciation limitation for each taxable year for passenger automobiles a taxpayer places in service in calendar year 2010. File taxes for free Use Table 1 for a passenger automobile (other than a truck or van) and Table 2 for a truck or van placed in service in calendar year 2010. File taxes for free REV. File taxes for free PROC. File taxes for free 2010-18 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2010 Tax Year Amount 1st Tax Year $3,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. File taxes for free PROC. File taxes for free 2010-18 TABLE 2 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2010 Tax Year Amount 1st Tax Year $3,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 . File taxes for free 02 Inclusions in Income of Lessees of Passenger Automobiles. File taxes for free A taxpayer must follow the procedures in § 1. File taxes for free 280F-7(a) for determining the inclusion amounts for passenger automobiles first leased in calendar year 2010. File taxes for free In applying these procedures, lessees of passenger automobiles other than trucks and vans should use Table 3 of this revenue procedure, while lessees of trucks and vans should use Table 4 of this revenue procedure. File taxes for free REV. File taxes for free PROC. File taxes for free 2010-18 TABLE 3 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2010 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $16,700 $17,000 3 7 10 11 14 17,000 17,500 4 8 13 15 16 17,500 18,000 5 10 16 19 21 18,000 18,500 6 13 18 23 26 18,500 19,000 7 15 22 26 31 19,000 19,500 8 17 25 30 35 19,500 20,000 9 19 29 34 39 20,000 20,500 10 21 32 38 44 20,500 21,000 11 23 35 42 48 21,000 21,500 12 26 38 45 53 21,500 22,000 13 28 41 50 57 22,000 23,000 14 31 46 56 63 23,000 24,000 16 36 52 63 73 24,000 25,000 18 40 59 71 81 25,000 26,000 20 44 66 78 90 26,000 27,000 22 49 71 86 100 27,000 28,000 24 53 78 94 108 28,000 29,000 26 57 85 101 118 29,000 30,000 28 61 92 109 126 30,000 31,000 30 66 97 117 135 31,000 32,000 32 70 104 125 144 32,000 33,000 34 74 111 132 153 33,000 34,000 36 79 117 140 161 34,000 35,000 38 83 123 148 171 35,000 36,000 40 87 130 156 179 36,000 37,000 42 92 136 163 188 37,000 38,000 44 96 143 170 198 38,000 39,000 46 100 149 179 206 39,000 40,000 48 105 155 186 215 40,000 41,000 50 109 162 194 224 41,000 42,000 52 113 169 201 233 42,000 43,000 54 118 174 210 241 43,000 44,000 56 122 181 217 251 44,000 45,000 58 126 188 225 259 45,000 46,000 60 131 194 232 269 46,000 47,000 61 135 201 240 277 47,000 48,000 63 140 207 248 286 48,000 49,000 65 144 213 256 295 49,000 50,000 67 148 220 263 304 50,000 51,000 69 153 226 271 313 51,000 52,000 71 157 232 279 322 52,000 53,000 73 161 239 287 331 53,000 54,000 75 166 245 294 340 54,000 55,000 77 170 252 302 348 55,000 56,000 79 174 258 310 358 56,000 57,000 81 178 265 318 366 57,000 58,000 83 183 271 325 375 58,000 59,000 85 187 278 333 384 59,000 60,000 87 191 284 341 393 60,000 62,000 90 198 294 352 406 62,000 64,000 94 207 306 368 424 64,000 66,000 98 215 320 382 443 66,000 68,000 102 224 332 398 460 68,000 70,000 106 232 346 413 478 70,000 72,000 110 241 358 429 496 72,000 74,000 114 250 371 444 513 74,000 76,000 118 258 384 460 531 76,000 78,000 122 267 396 476 549 78,000 80,000 126 276 409 491 566 80,000 85,000 132 291 432 518 598 85,000 90,000 142 313 464 556 643 90,000 95,000 152 334 497 594 687 95,000 100,000 162 356 528 634 731 100,000 110,000 177 388 577 691 798 110,000 120,000 196 432 641 768 887 120,000 130,000 216 475 705 846 976 130,000 140,000 236 518 770 922 1,065 140,000 150,000 256 561 834 1,000 1,154 150,000 160,000 275 605 898 1,077 1,243 160,000 170,000 295 648 963 1,153 1,333 170,000 180,000 315 691 1,027 1,231 1,421 180,000 190,000 334 735 1,091 1,308 1,510 190,000 200,000 354 778 1,155 1,386 1,599 200,000 210,000 374 821 1,220 1,462 1,688 210,000 220,000 393 865 1,284 1,539 1,777 220,000 230,000 413 908 1,348 1,617 1,866 230,000 240,000 433 951 1,413 1,693 1,956 240,000 and up 453 995 1,476 1,771 2,044 REV. File taxes for free PROC. File taxes for free 2010-18 TABLE 4 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2010 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later 17,000 17,500 3 6 9 10 11 17,500 18,000 4 8 12 14 16 18,000 18,500 5 10 15 18 21 18,500 19,000 6 12 19 22 24 19,000 19,500 7 15 21 26 29 19,500 20,000 8 17 25 29 34 20,000 20,500 9 19 28 33 38 20,500 21,000 10 21 31 37 43 21,000 21,500 11 23 35 41 47 21,500 22,000 12 25 38 45 51 22,000 23,000 13 29 42 51 58 23,000 24,000 15 33 49 58 67 24,000 25,000 17 37 56 66 76 25,000 26,000 19 42 62 73 85 26,000 27,000 21 46 68 82 93 27,000 28,000 23 50 75 89 103 28,000 29,000 25 55 81 97 111 29,000 30,000 27 59 88 104 121 30,000 31,000 29 63 94 113 129 31,000 32,000 31 68 100 120 138 32,000 33,000 33 72 107 127 148 33,000 34,000 35 76 114 135 156 34,000 35,000 37 81 119 143 165 35,000 36,000 39 85 126 151 174 36,000 37,000 41 89 133 158 183 37,000 38,000 43 94 139 166 191 38,000 39,000 45 98 145 174 201 39,000 40,000 47 102 152 182 209 40,000 41,000 49 106 159 189 218 41,000 42,000 51 111 164 198 227 42,000 43,000 53 115 171 205 236 43,000 44,000 55 119 178 213 245 44,000 45,000 57 124 184 220 254 45,000 46,000 59 128 190 228 263 46,000 47,000 60 133 197 235 272 47,000 48,000 62 137 203 244 280 48,000 49,000 64 142 209 251 290 49,000 50,000 66 146 216 259 298 50,000 51,000 68 150 223 266 308 51,000 52,000 70 154 229 275 316 52,000 53,000 72 159 235 282 325 53,000 54,000 74 163 242 290 334 54,000 55,000 76 167 249 297 343 55,000 56,000 78 172 254 305 352 56,000 57,000 80 176 261 313 361 57,000 58,000 82 180 268 320 370 58,000 59,000 84 185 274 328 378 59,000 60,000 86 189 280 336 388 60,000 62,000 89 195 291 347 401 62,000 64,000 93 204 303 363 418 64,000 66,000 97 213 315 379 436 66,000 68,000 101 221 329 394 454 68,000 70,000 105 230 341 410 472 70,000 72,000 109 239 354 424 490 72,000 74,000 113 247 367 440 508 74,000 76,000 117 256 380 455 526 76,000 78,000 121 264 393 471 543 78,000 80,000 125 273 406 486 561 80,000 85,000 131 289 428 513 592 85,000 90,000 141 310 461 552 636 90,000 95,000 151 332 492 591 681 95,000 100,000 161 353 525 629 726 100,000 110,000 176 386 573 686 793 110,000 120,000 195 430 637 763 882 120,000 130,000 215 473 701 841 971 130,000 140,000 235 516 766 918 1,059 140,000 150,000 255 559 830 995 1,149 150,000 160,000 274 603 894 1,072 1,238 160,000 170,000 294 646 958 1,150 1,326 170,000 180,000 314 689 1,023 1,226 1,416 180,000 190,000 333 733 1,087 1,303 1,505 190,000 200,000 353 776 1,151 1,381 1,594 200,000 210,000 373 819 1,216 1,457 1,683 210,000 220,000 392 863 1,280 1,534 1,772 220,000 230,000 412 906 1,344 1,612 1,861 230,000 240,000 432 949 1,409 1,689 1,949 240,000 and up 452 992 1,473 1,766 2,039 SECTION 5. File taxes for free EFFECTIVE DATE This revenue procedure applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2010. File taxes for free SECTION 6. File taxes for free DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. File taxes for free Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). File taxes for free For further information regarding this revenue procedure, contact Mr. File taxes for free Harvey at (202) 622-4930 (not a toll-free call). File taxes for free Prev  Up  Next   Home   More Internal Revenue Bulletins