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How To File 1040nr Ez

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How To File 1040nr Ez

How to file 1040nr ez 12. How to file 1040nr ez   Self-Employment Tax Table of Contents What's New for 2013 What's New for 2014 Introduction Topics - This chapter discusses: Useful Items - You may want to see: Why Pay Self-Employment Tax? How To Pay Self-Employment TaxReplacing a lost social security card. How to file 1040nr ez Name change. How to file 1040nr ez Penalty for underpayment of estimated tax. How to file 1040nr ez Who Must Pay Self-Employment Tax?Limited partner. How to file 1040nr ez Community property. How to file 1040nr ez Figuring Self-Employment EarningsLandlord Participation in Farming Methods for Figuring Net EarningsRegular Method Farm Optional Method Nonfarm Optional Method Using Both Optional Methods Reporting Self-Employment Tax What's New for 2013 Tax rates. How to file 1040nr ez  For tax years beginning in 2013, the social security part of the self-employment tax increases from 10. How to file 1040nr ez 4% to 12. How to file 1040nr ez 4%. How to file 1040nr ez The Medicare part of the tax remains at 2. How to file 1040nr ez 9%. How to file 1040nr ez As a result, the self-employment tax is increased from 13. How to file 1040nr ez 3% to 15. How to file 1040nr ez 3%. How to file 1040nr ez Additional Medicare Tax. How to file 1040nr ez . How to file 1040nr ez  For tax years beginning in 2013, a 0. How to file 1040nr ez 9% Additional Medicare Tax applies to your Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income above a threshold amount. How to file 1040nr ez Use Form 8959, Additional Medicare Tax, to figure this tax. How to file 1040nr ez For more information, see the Instructions for Form 8959. How to file 1040nr ez Maximum net earnings. How to file 1040nr ez  The maximum net self-employment earnings subject to the social security part (12. How to file 1040nr ez 4%) of the self-employment tax increased to $113,700 for 2013. How to file 1040nr ez There is no maximum limit on earnings subject to the Medicare part (2. How to file 1040nr ez 9%). How to file 1040nr ez What's New for 2014 Maximum net earnings. How to file 1040nr ez  The maximum net self-employment earnings subject to the social security part of the self-employment tax for 2014 will be discussed in the 2013 Publication 334. How to file 1040nr ez Introduction Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. How to file 1040nr ez It is similar to the social security and Medicare taxes withheld from the pay of most wage earners. How to file 1040nr ez You usually have to pay SE tax if you are self-employed. How to file 1040nr ez You are usually self-employed if you operate your own farm on land you either own or rent. How to file 1040nr ez You have to figure SE tax on Schedule SE (Form 1040). How to file 1040nr ez Farmers who have employees may have to pay the employer's share of social security and Medicare taxes, as well. How to file 1040nr ez See chapter 13 for information on employment taxes. How to file 1040nr ez Self-employment tax rate. How to file 1040nr ez   For tax years beginning in 2013, the self-employment tax rate is 15. How to file 1040nr ez 3%. How to file 1040nr ez The rate consists of two parts: 12. How to file 1040nr ez 4% for social security (old-age, survivors, and disability insurance) and 2. How to file 1040nr ez 9% for Medicare (hospital insurance). How to file 1040nr ez Topics - This chapter discusses: Why pay self-employment tax How to pay self-employment tax Who must pay self-employment tax Figuring self-employment earnings Landlord participation in farming Methods for figuring net earnings Reporting self-employment tax Useful Items - You may want to see: Publication 541 Partnerships Form (and Instructions) 1040 U. How to file 1040nr ez S. How to file 1040nr ez Individual Income Tax Return Sch F (Form 1040) Profit or Loss From Farming Sch SE (Form 1040) Self-Employment Tax 1065 U. How to file 1040nr ez S. How to file 1040nr ez Return of Partnership Income Sch K-1 (Form 1065) Partner's Share of Income, Deductions, Credits, etc. How to file 1040nr ez See chapter 16 for information about getting publications and forms. How to file 1040nr ez Why Pay Self-Employment Tax? Social security benefits are available to self-employed persons just as they are to wage earners. How to file 1040nr ez Your payments of SE tax contribute to your coverage under the social security system. How to file 1040nr ez Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. How to file 1040nr ez How to become insured under social security. How to file 1040nr ez   You must be insured under the social security system before you begin receiving social security benefits. How to file 1040nr ez You are insured if you have the required number of credits (also called quarters of coverage). How to file 1040nr ez Earning credits in 2013. How to file 1040nr ez   You can earn a maximum of four credits per year. How to file 1040nr ez For 2013, you earn one credit for each $1,160 of combined wages and self-employment earnings subject to social security tax. How to file 1040nr ez You need $4,640 ($1,160 × 4) of combined wages and self-employment earnings subject to social security tax to earn four credits in 2013. How to file 1040nr ez It does not matter whether the income is earned in 1 quarter or is spread over 2 or more quarters. How to file 1040nr ez For an explanation of the number of credits you must have to be insured and the benefits available to you and your family under the social security program, consult your nearest Social Security Administration (SSA) office or visit the SSA website at www. How to file 1040nr ez socialsecurity. How to file 1040nr ez gov. How to file 1040nr ez Making false statements to get or to increase social security benefits may subject you to penalties. How to file 1040nr ez The Social Security Administration (SSA) time limit for posting self-employment earnings. How to file 1040nr ez   Generally, the SSA will give you credit only for self-employment earnings reported on a tax return filed within 3 years, 3 months, and 15 days after the tax year you earned the income. How to file 1040nr ez    If you file your tax return or report a change in your self-employment earnings after the SSA time limit for posting self-employment earnings, the SSA may change its records, but only to remove or reduce the amount. How to file 1040nr ez The SSA will not change its records to increase your self-employment earnings after the SSA time limit listed above. How to file 1040nr ez How To Pay Self-Employment Tax To pay SE tax, you must have a social security number (SSN) or an individual taxpayer identification number (ITIN). How to file 1040nr ez This section explains how to: Obtain an SSN or ITIN, and Pay your SE tax using estimated tax. How to file 1040nr ez An ITIN does not entitle you to social security benefits. How to file 1040nr ez Obtaining an ITIN does not change your immigration or employment status under U. How to file 1040nr ez S. How to file 1040nr ez law. How to file 1040nr ez Obtaining a social security number. How to file 1040nr ez   If you have never had an SSN, apply for one using Form SS-5, Application for a Social Security Card. How to file 1040nr ez The application is also available in Spanish. How to file 1040nr ez You can get this form at any Social Security office or by calling 1-800-772-1213. How to file 1040nr ez    You can also download Form SS-5 from the Social Security Administration website at  www. How to file 1040nr ez socialsecurity. How to file 1040nr ez gov. How to file 1040nr ez   If you have a social security number from the time you were an employee, you must use that number. How to file 1040nr ez Do not apply for a new one. How to file 1040nr ez Replacing a lost social security card. How to file 1040nr ez   If you have a number but lost your card, file Form SS-5. How to file 1040nr ez You will get a new card showing your original number, not a new number. How to file 1040nr ez Name change. How to file 1040nr ez   If your name has changed since you received your social security card, complete Form SS-5 to report a name change. How to file 1040nr ez Obtaining an individual taxpayer identification number. How to file 1040nr ez   The IRS will issue you an ITIN, for tax use only, if you are a nonresident or resident alien and you do not have, and are not eligible to get, an SSN. How to file 1040nr ez To apply for an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number. How to file 1040nr ez You can get this form by calling 1-800-829-3676. How to file 1040nr ez For more information on ITINs, see Publication 1915, Understanding Your IRS Individual Taxpayer Identification Number. How to file 1040nr ez Form W-7 and Publication 1915 are also available in Spanish. How to file 1040nr ez    You can also download Form W-7 from the IRS website at IRS. How to file 1040nr ez gov. How to file 1040nr ez Paying estimated tax. How to file 1040nr ez   Estimated tax is the method used to pay tax (including SE tax) on income not subject to withholding. How to file 1040nr ez You generally have to make estimated tax payments if you expect to owe tax, including SE tax, of $1,000 or more when you file your return. How to file 1040nr ez Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay the tax. How to file 1040nr ez   However, if at least two-thirds of your gross income for 2013 or 2014 was from farming and you file your 2014 Form 1040 and pay all the tax due by March 2, 2015, you do not have to pay any estimated tax. How to file 1040nr ez For more information about estimated tax for farmers, see chapter 15. How to file 1040nr ez Penalty for underpayment of estimated tax. How to file 1040nr ez   You may have to pay a penalty if you do not pay enough estimated tax by its due date. How to file 1040nr ez Who Must Pay Self-Employment Tax? You must pay SE tax and file Schedule SE (Form 1040) if your net earnings from self-employment were $400 or more. How to file 1040nr ez The SE tax rules apply no matter how old you are and even if you are already receiving social security or Medicare benefits. How to file 1040nr ez Aliens. How to file 1040nr ez   Generally, resident aliens must pay self-employment tax under the same rules that apply to U. How to file 1040nr ez S. How to file 1040nr ez citizens. How to file 1040nr ez Nonresident aliens are not subject to self-employment tax. How to file 1040nr ez However, residents of the Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are subject to self-employment tax, as they are considered U. How to file 1040nr ez S. How to file 1040nr ez residents for self-employment tax purposes. How to file 1040nr ez For more information on aliens, see Publication 519, U. How to file 1040nr ez S. How to file 1040nr ez Tax Guide for Aliens. How to file 1040nr ez Are you self-employed?   You are self-employed if you carry on a trade or business (such as running a farm) as a sole proprietor, an independent contractor, a member of a partnership, or are otherwise in business for yourself. How to file 1040nr ez A trade or business is generally an activity carried on for a livelihood or in good faith to make a profit. How to file 1040nr ez Share farmer. How to file 1040nr ez   You are a self-employed farmer under an income-sharing arrangement if both the following apply. How to file 1040nr ez You produce a crop or raise livestock on land belonging to another person. How to file 1040nr ez Your share of the crop or livestock, or the proceeds from their sale, depends on the amount produced. How to file 1040nr ez Your net farm profit or loss from the income-sharing arrangement is reported on Schedule F (Form 1040) and included in your self-employment earnings. How to file 1040nr ez   If you produce a crop or livestock on land belonging to another person and are to receive a specified rate of pay, a fixed sum of money, or a fixed quantity of the crop or livestock, and not a share of the crop or livestock or their proceeds, you may be either self-employed or an employee of the landowner. How to file 1040nr ez This will depend on whether the landowner has the right to direct or control your performance of services. How to file 1040nr ez Example. How to file 1040nr ez A share farmer produces a crop on land owned by another person on a 50-50 crop-share basis. How to file 1040nr ez Under the terms of their agreement, the share farmer furnishes the labor and half the cost of seed and fertilizer. How to file 1040nr ez The landowner furnishes the machinery and equipment used to produce and harvest the crop, and half the cost of seed and fertilizer. How to file 1040nr ez The share farmer is provided a house in which to live. How to file 1040nr ez The landowner and the share farmer decide on a cropping plan. How to file 1040nr ez The share farmer is a self-employed farmer for purposes of the agreement to produce the crops, and the share farmer's part of the profit or loss from the crops is reported on Schedule F (Form 1040) and included in self-employment earnings. How to file 1040nr ez The tax treatment of the landowner is discussed later under Landlord Participation in Farming. How to file 1040nr ez Contract farming. How to file 1040nr ez   Under typical contract farming arrangements, the grower receives a fixed payment per unit of crops or finished livestock delivered to the processor or packing company. How to file 1040nr ez Since the grower typically furnishes labor and bears some production risk, the payments are reported on Schedule F and are therefore subject to self-employment tax. How to file 1040nr ez 4-H Club or FFA project. How to file 1040nr ez   If an individual participates in a 4-H Club or Future Farmers of America (FFA) project, any net income received from sales or prizes related to the project may be subject to income tax. How to file 1040nr ez Report the net income as “Other income” on line 21 of Form 1040. How to file 1040nr ez If necessary, attach a statement showing the gross income and expenses. How to file 1040nr ez The net income may not be subject to SE tax if the project is primarily for educational purposes and not for profit, and is completed by the individual under the rules and economic restrictions of the sponsoring 4-H or FFA organization. How to file 1040nr ez Such a project is generally not considered a trade or business. How to file 1040nr ez Partners in a partnership. How to file 1040nr ez   Generally, you are self-employed if you are a member of a partnership that carries on a trade or business. How to file 1040nr ez Limited partner. How to file 1040nr ez   If you are a limited partner, your partnership income is generally not subject to SE tax. How to file 1040nr ez However, guaranteed payments you receive for services you perform for the partnership are subject to SE tax and should be reported to you in box 14 of your Schedule K-1 (Form 1065). How to file 1040nr ez Business Owned and Operated by Spouses. How to file 1040nr ez   If you and your spouse jointly own and operate a farm as an unincorporated business and share in the profits and losses, you are partners in a partnership whether or not you have a formal partnership agreement. How to file 1040nr ez You must file Form 1065, instead of Schedule F, unless you make a joint election to be treated as a qualified joint venture. How to file 1040nr ez Making this election will allow you to avoid the complexity of Form 1065 but still give each spouse credit for social security earnings on which retirement benefits are based. How to file 1040nr ez Qualified joint venture. How to file 1040nr ez   If you and your spouse each materially participate as the only members of a jointly owned and operated farm, and you file a joint tax return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership for the tax year. How to file 1040nr ez For an explanation of “material participation,” see the instructions for Schedule C, line G, and the instructions for Schedule F, line E. How to file 1040nr ez   To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. How to file 1040nr ez Each of you must file a separate Schedule F and a separate Schedule SE. How to file 1040nr ez For more information, see Qualified Joint Venture in the Instructions for Schedule SE (Form 1040). How to file 1040nr ez Spouse employee. How to file 1040nr ez   If your spouse is your employee, not your partner, you must withhold and pay social security and Medicare taxes for him or her. How to file 1040nr ez For more information about employment taxes, see chapter 13. How to file 1040nr ez Community property. How to file 1040nr ez   If you are a partner and your distributive share of any income or loss from a trade or business carried on by the partnership is community property, treat your share as your self-employment earnings. How to file 1040nr ez Do not treat any of your share as self-employment earnings of your spouse. How to file 1040nr ez Figuring Self-Employment Earnings Farmer. How to file 1040nr ez   If you are self-employed as a farmer, use Schedule F (Form 1040) to figure your self-employment earnings. How to file 1040nr ez Partnership income or loss. How to file 1040nr ez   If you are a member of a partnership that carries on a trade or business, the partnership should report your self-employment earnings in box 14, code A, of your Schedule K-1 (Form 1065). How to file 1040nr ez Box 14 of Schedule K-1 may also provide amounts for gross farming or fishing income (code B) and gross nonfarm income (code C). How to file 1040nr ez Use these amounts if you use the farm or nonfarm optional method to figure net earnings from self-employment (see Methods for Figuring Net Earnings , later). How to file 1040nr ez   If you are a general partner, you may need to reduce these reported earnings by amounts you claim as a section 179 deduction, unreimbursed partnership expenses, or depletion on oil and gas properties. How to file 1040nr ez   If the amount reported is a loss, include only the deductible amount when you figure your total self-employment earnings. How to file 1040nr ez   For more information, see the Partner's Instructions for Schedule K-1 (Form 1065). How to file 1040nr ez   For general information on partnerships, see Publication 541. How to file 1040nr ez More than one business. How to file 1040nr ez   If you have self-employment earnings from more than one trade, business, or profession, you generally must combine the net profit or loss from each to determine your total self-employment earnings. How to file 1040nr ez A loss from one business reduces your profit from another business. How to file 1040nr ez However, do not combine earnings from farm and nonfarm businesses if you are using one of the optional methods (discussed later) to figure net earnings. How to file 1040nr ez Community property. How to file 1040nr ez   If any of the income from a farm or business, other than a partnership, is community property under state law, it is included in the self-employment earnings of the spouse carrying on the trade or business. How to file 1040nr ez Lost income payments. How to file 1040nr ez   Lost income payments received from insurance or other sources for reducing or stopping farming activities are included in self-employment earnings. How to file 1040nr ez These include USDA payments to compensate for lost income resulting from reductions in tobacco quotas and allotments. How to file 1040nr ez Even if you are not farming when you receive the payment, it is included in self-employment earnings if it relates to your farm business (even though it is temporarily inactive). How to file 1040nr ez A connection exists if it is clear the payment would not have been made but for your conduct of your farm business. How to file 1040nr ez Gain or loss. How to file 1040nr ez   A gain or loss from the disposition of property that is neither stock in trade nor held primarily for sale to customers is not included in self-employment earnings. How to file 1040nr ez It does not matter whether the disposition is a sale, exchange, or involuntary conversion. How to file 1040nr ez For example, gains or losses from the disposition of the following types of property are not included in self-employment earnings. How to file 1040nr ez Investment property. How to file 1040nr ez Depreciable property or other fixed assets used in your trade or business. How to file 1040nr ez Livestock held for draft, breeding, sport, or dairy purposes, and not held primarily for sale, regardless of how long the livestock was held, or whether it was raised or purchased. How to file 1040nr ez Unharvested standing crops sold with land held more than 1 year. How to file 1040nr ez Timber, coal, or iron ore held for more than 1 year if an economic interest was retained, such as a right to receive coal royalties. How to file 1040nr ez   A gain or loss from the cutting of timber is not included in self-employment earnings if the cutting is treated as a sale or exchange. How to file 1040nr ez For more information on electing to treat the cutting of timber as a sale or exchange, see Timber in chapter 8. How to file 1040nr ez Wages and salaries. How to file 1040nr ez   Wages and salaries received for services performed as an employee and covered by social security or railroad retirement are not included in self-employment earnings. How to file 1040nr ez   Wages paid in kind to you for agricultural labor, such as commodity wages, are not included in self-employment earnings. How to file 1040nr ez Retired partner. How to file 1040nr ez   Retirement income received by a partner from his or her partnership under a written plan is not included in self-employment earnings if all the following apply. How to file 1040nr ez The retired partner performs no services for the partnership during the year. How to file 1040nr ez The retired partner is owed only the retirement payments. How to file 1040nr ez The retired partner's share (if any) of the partnership capital was fully paid to the retired partner. How to file 1040nr ez The payments to the retired partner are lifelong periodic payments. How to file 1040nr ez Conservation Reserve Program (CRP) payments. How to file 1040nr ez   Under the Conservation Reserve Program (CRP), if you own or operate highly erodible or other specified cropland, you may enter into a longterm contract with the USDA, agreeing to convert to a less intensive use of that cropland. How to file 1040nr ez You must include the annual rental payments and any onetime incentive payment you receive under the program on Schedule F, lines 4a and 4b. How to file 1040nr ez Cost share payments you receive may qualify for the costsharing exclusion. How to file 1040nr ez See Cost-Sharing Exclusion (Improvements), above. How to file 1040nr ez CRP payments are reported to you on Form 1099G. How to file 1040nr ez Individuals who are receiving Social Security retirement or disability benefits may exclude CRP payments when calculating self-employment tax. How to file 1040nr ez See the instructions for Schedule SE (Form 1040). How to file 1040nr ez Self-employed health insurance deduction. How to file 1040nr ez   You cannot deduct the self-employed health insurance deduction you report on Form 1040, line 29, from self-employment earnings on Schedule SE (Form 1040). How to file 1040nr ez Landlord Participation in Farming As a general rule, income and deductions from rentals and from personal property leased with real estate are not included in determining self-employment earnings. How to file 1040nr ez However, income and deductions from farm rentals, including government commodity program payments received by a landowner who rents land, are included if the rental arrangement provides that the landowner will, and does, materially participate in the production or management of production of the farm products on the land. How to file 1040nr ez Crop shares. How to file 1040nr ez   Rent paid in the form of crop shares is included in self-employment earnings for the year you sell, exchange, give away, or use the crop shares if you meet one of the four material participation tests (discussed next) at the time the crop shares are produced. How to file 1040nr ez Feeding such crop shares to livestock is considered using them. How to file 1040nr ez Your gross income for figuring your self-employment earnings includes the fair market value of the crop shares when they are used as feed. How to file 1040nr ez Material participation for landlords. How to file 1040nr ez   You materially participate if you have an arrangement with your tenant for your participation and you meet one or more of the following tests. How to file 1040nr ez You do at least three of the following. How to file 1040nr ez Pay, using cash or credit, at least half the direct costs of producing the crop or livestock. How to file 1040nr ez Furnish at least half the tools, equipment, and livestock used in the production activities. How to file 1040nr ez Advise or consult with your tenant. How to file 1040nr ez Inspect the production activities periodically. How to file 1040nr ez You regularly and frequently make, or take an important part in making, management decisions substantially contributing to or affecting the success of the enterprise. How to file 1040nr ez You work 100 hours or more spread over a period of 5 weeks or more in activities connected with agricultural production. How to file 1040nr ez You do things that, considered in their totality, show you are materially and significantly involved in the production of the farm commodities. How to file 1040nr ez These tests may be used as general guides for determining whether you are a material participant. How to file 1040nr ez Example. How to file 1040nr ez Drew Houston agrees to produce a crop on J. How to file 1040nr ez Clarke's cotton farm, with each receiving half the proceeds. How to file 1040nr ez Clarke advises Houston when to plant, spray, and pick the cotton. How to file 1040nr ez During the growing season, Clarke inspects the crop every few days to determine whether Houston is properly taking care of the crop. How to file 1040nr ez Houston furnishes all labor needed to grow and harvest the crop. How to file 1040nr ez The management decisions made by Clarke in connection with the care of the cotton crop and his regular inspection of the crop establish that he participates to a material degree in the cotton production operations. How to file 1040nr ez The income Clarke receives from his cotton farm is included in his self-employment earnings. How to file 1040nr ez Methods for Figuring Net Earnings There are three ways to figure your net earnings from self-employment. How to file 1040nr ez The regular method. How to file 1040nr ez The farm optional method. How to file 1040nr ez The nonfarm optional method. How to file 1040nr ez You must use the regular method unless you are eligible to use one or both of the optional methods. How to file 1040nr ez See Figure 12-1 , shown later. How to file 1040nr ez Figure 12-1. How to file 1040nr ez Can I Use the Optional Methods? Please click here for the text description of the image. How to file 1040nr ez Figure 12–1. How to file 1040nr ez Can I Use the Optional Methods? Why use an optional method?   You may want to use the optional methods (discussed later) when you have a loss or a small net profit and any one of the following applies. How to file 1040nr ez You want to receive credit for social security benefit coverage. How to file 1040nr ez You incurred child or dependent care expenses for which you could claim a credit. How to file 1040nr ez (An optional method may increase your earned income, which could increase your credit. How to file 1040nr ez ) You are entitled to the earned income credit. How to file 1040nr ez (An optional method may increase your earned income, which could increase your credit. How to file 1040nr ez ) You are entitled to the additional child tax credit. How to file 1040nr ez (An optional method may increase your earned income, which could increase your credit. How to file 1040nr ez ) Effects of using an optional method. How to file 1040nr ez   Using an optional method could increase your SE tax. How to file 1040nr ez Paying more SE tax may result in you getting higher social security disability or retirement benefits. How to file 1040nr ez   If you use either or both optional methods, you must figure and pay the SE tax due under these methods even if you would have had a smaller SE tax or no SE tax using the regular method. How to file 1040nr ez   The optional methods may be used only to figure your SE tax. How to file 1040nr ez To figure your income tax, include your actual self-employment earnings in gross income, regardless of which method you use to determine SE tax. How to file 1040nr ez Regular Method Multiply your total self-employment earnings by 92. How to file 1040nr ez 35% (. How to file 1040nr ez 9235) to get your net earnings under the regular method. How to file 1040nr ez See Short Schedule SE, line 4, or Long Schedule SE, line 4a. How to file 1040nr ez Net earnings figured using the regular method are also called “actual net earnings. How to file 1040nr ez ” Farm Optional Method Use the farm optional method only for self-employment earnings from a farming business. How to file 1040nr ez You can use this method if you meet either of the following tests. How to file 1040nr ez Your gross farm income is $6,960 or less. How to file 1040nr ez Your net farm profits are less than $5,024. How to file 1040nr ez Gross farm income. How to file 1040nr ez   Your gross farm income is the total of the amounts from: Schedule F (Form 1040), line 9, and Schedule K-1 (Form 1065), box 14, code B (from farm partnerships). How to file 1040nr ez Net farm profits. How to file 1040nr ez   Net farm profits generally are the total of the amounts from: Schedule F (Form 1040), line 34, and Schedule K-1 (Form 1065), box 14, code A (from farm partnerships). How to file 1040nr ez However, you may need to adjust the amount reported on Schedule K-1 if you are a general partner or if it is a loss. How to file 1040nr ez For more information, see Partnership income or loss , earlier. How to file 1040nr ez Figuring farm net earnings. How to file 1040nr ez   If you meet either of the two tests explained above, use Table 12-1. How to file 1040nr ez Figuring Farm Net Earnings , to figure your net earnings from self-employment under the farm optional method. How to file 1040nr ez Table 12-1. How to file 1040nr ez Figuring Farm Net Earnings IF your gross farm income  is. How to file 1040nr ez . How to file 1040nr ez . How to file 1040nr ez THEN your net earnings are equal to. How to file 1040nr ez . How to file 1040nr ez . How to file 1040nr ez $6,960 or less Two-thirds of your gross farm income. How to file 1040nr ez More than $6,960 $4,640 Optional method can reduce or eliminate SE tax. How to file 1040nr ez   If your gross farm income is $6,960 or less and your farm net earnings figured under the farm optional method are less than your actual net earnings, you can use the farm optional method to reduce or eliminate your SE tax. How to file 1040nr ez Your actual net earnings are your net earnings figured using the regular method, explained earlier. How to file 1040nr ez Example. How to file 1040nr ez Your gross farm income is $540 and your net farm profit is $460. How to file 1040nr ez Consequently, your net earnings figured under the farm optional method are $360 (2/3 of $540) and your actual net earnings are $425 (92. How to file 1040nr ez 35% of $460). How to file 1040nr ez You owe no SE tax if you use the optional method because your net earnings under the farm optional method are less than $400. How to file 1040nr ez Nonfarm Optional Method This is an optional method available for determining net earnings from nonfarm self-employment, much like the farm optional method. How to file 1040nr ez If you are also engaged in a nonfarm business, you may be able to use this method to figure your nonfarm net earnings. How to file 1040nr ez You can use this method even if you do not use the farm optional method for determining your farm net earnings and even if you have a net loss from your nonfarm business. How to file 1040nr ez For more information about the nonfarm optional method, see Publication 334. How to file 1040nr ez You cannot combine farm and nonfarm self-employment earnings to figure your net earnings under either of the optional methods. How to file 1040nr ez Using Both Optional Methods If you use both optional methods, you must add the net earnings figured under each method to arrive at your total net earnings from self-employment. How to file 1040nr ez You can report less than your total actual farm and nonfarm net earnings but not less than actual nonfarm net earnings. How to file 1040nr ez If you use both optional methods, you can report no more than $4,640 as your combined net earnings from self-employment. How to file 1040nr ez Reporting Self-Employment Tax Use Schedule SE (Form 1040) to figure and report your SE tax. How to file 1040nr ez Then, enter the SE tax on line 56 of Form 1040 and attach Schedule SE to Form 1040. How to file 1040nr ez Most taxpayers can use Section A–Short Schedule SE to figure their SE tax. How to file 1040nr ez However, certain taxpayers must use Section B–Long Schedule SE. How to file 1040nr ez Use the chart on page 1 of Schedule SE to find out which one to use. How to file 1040nr ez If you have to pay SE tax, you must file Form 1040 (with Schedule SE attached) even if you do not otherwise have to file a federal income tax return. How to file 1040nr ez Deduction for employer-equivalent portion of self-employment tax. How to file 1040nr ez   You can deduct the employer-equivalent portion of your SE tax in figuring your adjusted gross income. How to file 1040nr ez This deduction only affects your income tax. How to file 1040nr ez It does not affect either your net earnings from self-employment or your SE tax. How to file 1040nr ez   To deduct the tax, enter on Form 1040, line 27, the amount shown on Section A, Line 6, or Section B, line 13, Deduction for employer-equivalent portion of self-employment tax, of the Schedule SE. How to file 1040nr ez Joint return. How to file 1040nr ez   Even if you file a joint return, you cannot file a joint Schedule SE. How to file 1040nr ez This is true whether one spouse or both spouses have self-employment earnings. How to file 1040nr ez Your spouse is not considered self-employed just because you are. How to file 1040nr ez If both of you have self-employment earnings, each of you must complete a separate Schedule SE. How to file 1040nr ez However, if one spouse uses the Short Schedule SE and the other spouse has to use the Long Schedule SE, both can use the same form. How to file 1040nr ez Attach both schedules to the joint return. How to file 1040nr ez If you and your spouse operate a business as a partnership, see Business Owned and Operated by Spouses and Qualified joint venture , earlier, under Who Must Pay Self-Employment Tax . How to file 1040nr ez Prev  Up  Next   Home   More Online Publications
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The How To File 1040nr Ez

How to file 1040nr ez 2. How to file 1040nr ez   American Opportunity Credit Table of Contents Introduction Can You Claim the CreditWho Can Claim the Credit Who Cannot Claim the Credit What Expenses QualifyQualified Education Expenses No Double Benefit Allowed Expenses That Do Not Qualify Who Is an Eligible StudentException. How to file 1040nr ez Who Can Claim a Dependent's Expenses Figuring the CreditEffect of the Amount of Your Income on the Amount of Your Credit Refundable Part of Credit Claiming the Credit Introduction For 2013, there are two tax credits available to help you offset the costs of higher education by reducing the amount of your income tax. How to file 1040nr ez They are the American opportunity credit (this chapter) and the lifetime learning credit ( chapter 3 ). How to file 1040nr ez This chapter explains: Who can claim the American opportunity credit, What expenses qualify for the credit, Who is an eligible student, Who can claim a dependent's expenses, How to figure the credit, How to claim the credit, and When the credit must be repaid. How to file 1040nr ez What is the tax benefit of the American opportunity credit. How to file 1040nr ez   For the tax year, you may be able to claim an American opportunity credit of up to $2,500 for qualified education expenses paid for each eligible student. How to file 1040nr ez   A tax credit reduces the amount of income tax you may have to pay. How to file 1040nr ez Unlike a deduction, which reduces the amount of income subject to tax, a credit directly reduces the tax itself. How to file 1040nr ez Forty percent of the American opportunity credit may be refundable. How to file 1040nr ez This means that if the refundable portion of your credit is more than your tax, the excess will be refunded to you. How to file 1040nr ez   Your allowable American opportunity credit may be limited by the amount of your income. How to file 1040nr ez Also, the nonrefundable part of the credit may be limited by the amount of your tax. How to file 1040nr ez Overview of the American opportunity credit. How to file 1040nr ez   See Table 2-1, Overview of the American Opportunity Credit , for the basics of this credit. How to file 1040nr ez The details are discussed in this chapter. How to file 1040nr ez Can you claim more than one education credit this year. How to file 1040nr ez   For each student, you can elect for any year only one of the credits. How to file 1040nr ez For example, if you elect to take the American opportunity credit for a child on your 2013 tax return, you cannot use that same child's qualified education expenses to figure the lifetime learning credit for 2013. How to file 1040nr ez   If you pay qualified education expenses for more than one student in the same year, you can choose to take the American opportunity credit on a per-student, per-year basis. How to file 1040nr ez If you pay qualified education expenses for a student (or students) for whom you do not claim the American opportunity credit, you can use the adjusted qualified education expenses of that student (or those students) in figuring your lifetime learning credit. How to file 1040nr ez This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. How to file 1040nr ez Differences between the American opportunity and lifetime learning credits. How to file 1040nr ez   There are several differences between these two credits. How to file 1040nr ez For example, you can claim the American opportunity credit based on the same student's expenses for no more than 4 tax years, which includes any tax years you claimed the Hope Scholarship Credit for that student. How to file 1040nr ez However, there is no limit on the number of years for which you can claim a lifetime learning credit based on the same student's expenses. How to file 1040nr ez The differences between these credits are shown in Appendix B, Highlights of Education Tax Benefits for Tax Year 2013 near the end of this publication. How to file 1040nr ez If you claim the American opportunity credit for any student, you can choose between using that student's adjusted qualified education expenses for the American opportunity credit or the lifetime learning credit. How to file 1040nr ez If you have the choice, the American opportunity credit will always be greater than the lifetime learning credit. How to file 1040nr ez Table 2-1. How to file 1040nr ez Overview of the American Opportunity Credit Maximum credit Up to $2,500 credit per eligible student Limit on modified adjusted gross income (MAGI) $180,000 if married filing jointly; $90,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable 40% of credit may be refundable; the rest is nonrefundable Number of years of postsecondary education Available ONLY if the student had not completed the first 4 years of postsecondary education before 2013 Number of tax years credit available Available ONLY for 4 tax years per eligible student (including any year(s) Hope Scholarship Credit was claimed) Type of program required Student must be pursuing a program leading to a degree or other recognized education credential Number of courses Student must be enrolled at least half time for at least one academic period that begins during the tax year Felony drug conviction As of the end of 2013, the student had not been convicted of a felony for possessing or distributing a controlled substance Qualified expenses Tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Can You Claim the Credit The following rules will help you determine if you are eligible to claim the American opportunity credit on your tax return. How to file 1040nr ez Who Can Claim the Credit Generally, you can claim the American opportunity credit if all three of the following requirements are met. How to file 1040nr ez You pay qualified education expenses of higher education. How to file 1040nr ez You pay the education expenses for an eligible student. How to file 1040nr ez The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. How to file 1040nr ez Student qualifications. How to file 1040nr ez   Generally, you can take the American opportunity credit for a student only if all of the following four requirements are met. How to file 1040nr ez As of the beginning of 2013, the student had not completed the first four years of postsecondary education (generally, the freshman through senior years of college), as determined by the eligible educational institution. How to file 1040nr ez For this purpose, do not include academic credit awarded solely because of the student's performance on proficiency examinations. How to file 1040nr ez Neither the American opportunity credit nor the Hope Scholarship Credit has been claimed (by you or anyone else) for this student for any four tax years before 2013. How to file 1040nr ez If the American opportunity credit (and Hope Scholarship Credit) has been claimed for this student for any three or fewer tax years before 2013, this requirement is met. How to file 1040nr ez For at least one academic period beginning (or treated as beginning) in 2013, the student both: Was enrolled in a program that leads to a degree, certificate, or other recognized educational credential; and Carried at least one-half the normal full-time workload for his or her course of study. How to file 1040nr ez The standard for what is half of the normal full-time work load is determined by each eligible educational institution. How to file 1040nr ez However, the standard may not be lower than any of those established by the U. How to file 1040nr ez S. How to file 1040nr ez Department of Education under the Higher Education Act of 1965. How to file 1040nr ez For purposes of whether the student satisfies this third requirement for 2013, treat an academic period beginning in the first three months of 2014 as if it began in 2013 if qualified education expenses for the student were paid in 2013 for that academic period. How to file 1040nr ez See Prepaid expenses, later. How to file 1040nr ez As of the end of 2013, the student had not been convicted of a federal or state felony for possessing or distributing a controlled substance. How to file 1040nr ez Example 1. How to file 1040nr ez Sharon was eligible for the Hope Scholarship Credit for 2007 and 2008 and for the American opportunity credit for 2010 and 2012. How to file 1040nr ez Her parents claimed the Hope Scholarship Credit for Sharon on their tax returns for 2007 and 2008 and claimed the American opportunity credit for Sharon on their 2010 tax return. How to file 1040nr ez Sharon claimed the American opportunity credit on her 2012 tax return. How to file 1040nr ez The American opportunity credit and Hope Scholarship Credit have been claimed for Sharon for four tax years before 2013. How to file 1040nr ez Therefore, the American opportunity credit cannot be claimed by Sharon for 2013. How to file 1040nr ez If Sharon were to file Form 8863 for 2013, she would check “Yes” for Part III, line 23, and would be eligible to claim only the lifetime learning credit. How to file 1040nr ez Example 2. How to file 1040nr ez Wilbert was eligible for the American opportunity credit for 2009, 2010, 2011, and 2013. How to file 1040nr ez His parents claimed the American opportunity credit for Wilbert on their tax returns for 2009, 2010, and 2011. How to file 1040nr ez No one claimed an American opportunity credit or Hope Scholarship Credit for Wilbert for any other tax year. How to file 1040nr ez The American opportunity credit and Hope Scholarship Credit have been claimed for Wilbert for only three tax years before 2013. How to file 1040nr ez Therefore, Wilbert meets the second requirement to be eligible for the American opportunity credit. How to file 1040nr ez If Wilbert were to file Form 8863 for 2013, he would check “No” for Part III, line 23. How to file 1040nr ez If Wilbert meets all of the other requirements, he is eligible for the American opportunity credit. How to file 1040nr ez Example 3. How to file 1040nr ez Glenda enrolls on a full-time basis in a degree program for the 2014 Spring semester, which begins in January 2014. How to file 1040nr ez Glenda pays her tuition for the 2014 Spring semester in December 2013. How to file 1040nr ez Because the tuition Glenda paid in 2013 relates to an academic period that begins in the first 3 months of 2014, her eligibility to claim an American opportunity credit in 2013 is determined as if the 2014 Spring semester began in 2013. How to file 1040nr ez If the requirements above are not met for any student, you cannot take the American opportunity credit for that student. How to file 1040nr ez You may be able to take the lifetime learning credit for part or all of that student's qualified education expenses instead. How to file 1040nr ez Note. How to file 1040nr ez Qualified education expenses paid by a dependent for whom you claim an exemption, or by a third party for that dependent, are considered paid by you. How to file 1040nr ez “Qualified education expenses” are defined later under Qualified Education Expenses . How to file 1040nr ez “Eligible students” are defined later under Who Is an Eligible Student . How to file 1040nr ez A dependent for whom you claim an exemption is defined later under Who Can Claim a Dependent's Expenses . How to file 1040nr ez You may find Figure 2-1, Can You Claim the American Opportunity Credit for 2013 , later, helpful in determining if you can claim an American opportunity credit on your tax return. How to file 1040nr ez This image is too large to be displayed in the current screen. How to file 1040nr ez Please click the link to view the image. How to file 1040nr ez Figure 2-1 Can you claim the American opportunity credit for 2012? Who Cannot Claim the Credit You cannot claim the American opportunity credit for 2013 if any of the following apply. How to file 1040nr ez Your filing status is married filing separately. How to file 1040nr ez You are listed as a dependent on another person's tax return (such as your parents'). How to file 1040nr ez See Who Can Claim a Dependent's Expenses , later. How to file 1040nr ez Your modified adjusted gross income (MAGI) is $90,000 or more ($180,000 or more in the case of a joint return). How to file 1040nr ez MAGI is explained later under Effect of the Amount of Your Income on the Amount of Your Credit . How to file 1040nr ez 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. How to file 1040nr ez More information on nonresident aliens can be found in Publication 519, U. How to file 1040nr ez S. How to file 1040nr ez Tax Guide for Aliens. How to file 1040nr ez What Expenses Qualify The American opportunity credit is based on adjusted qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. How to file 1040nr ez Generally, the credit is allowed for adjusted qualified education expenses paid in 2013 for an academic period beginning in 2013 or beginning in the first three months of 2014. How to file 1040nr ez For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning January 2014, you can use that $1,500 in figuring your 2013 credit. How to file 1040nr ez Academic period. How to file 1040nr ez   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. How to file 1040nr ez 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. How to file 1040nr ez Paid with borrowed funds. How to file 1040nr ez   You can claim an American opportunity credit for qualified education expenses paid with the proceeds of a loan. How to file 1040nr ez Use the expenses to figure the American opportunity credit for the year in which the expenses are paid, not the year in which the loan is repaid. How to file 1040nr ez Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. How to file 1040nr ez Student withdraws from class(es). How to file 1040nr ez   You can claim an American opportunity credit for qualified education expenses not refunded when a student withdraws. How to file 1040nr ez Qualified Education Expenses For purposes of the American opportunity credit, qualified education expenses are tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. How to file 1040nr ez Eligible educational institution. How to file 1040nr ez   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. How to file 1040nr ez S. How to file 1040nr ez Department of Education. How to file 1040nr ez It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. How to file 1040nr ez The educational institution should be able to tell you if it is an eligible educational institution. How to file 1040nr ez   Certain educational institutions located outside the United States also participate in the U. How to file 1040nr ez S. How to file 1040nr ez Department of Education's Federal Student Aid (FSA) programs. How to file 1040nr ez Related expenses. How to file 1040nr ez   Student-activity fees are included in qualified education expenses only if the fees must be paid to the institution as a condition of enrollment or attendance. How to file 1040nr ez   However, expenses for books, supplies, and equipment needed for a course of study are included in qualified education expenses whether or not the materials are purchased from the educational institution. How to file 1040nr ez Prepaid expenses. How to file 1040nr ez   Qualified education expenses paid in 2013 for an academic period that begins in the first three months of 2014 can be used in figuring an education credit for 2013 only. How to file 1040nr ez See Academic period, earlier. How to file 1040nr ez 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 an education credit for 2013 only (if you meet all the other requirements). How to file 1040nr ez    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). How to file 1040nr ez   In the following examples, assume that each student is an eligible student at an eligible educational institution. How to file 1040nr ez Example 1. How to file 1040nr ez Jefferson is a sophomore in University V's degree program in dentistry. How to file 1040nr ez This year, in addition to tuition, he is required to pay a fee to the university for the rental of the dental equipment he will use in this program. How to file 1040nr ez Because the equipment rental is needed for his course of study, Jefferson's equipment rental fee is a qualified expense. How to file 1040nr ez Example 2. How to file 1040nr ez Grace and William, both first-year students at College W, are required to have certain books and other reading materials to use in their mandatory first-year classes. How to file 1040nr ez The college has no policy about how students should obtain these materials, but any student who purchases them from College W's bookstore will receive a bill directly from the college. How to file 1040nr ez William bought his books from a friend; Grace bought hers at College W's bookstore. How to file 1040nr ez Both are qualified education expenses for the American opportunity credit. How to file 1040nr ez Example 3. How to file 1040nr ez When Kelly enrolled at College X for her freshman year, she had to pay a separate student activity fee in addition to her tuition. How to file 1040nr ez This activity fee is required of all students, and is used solely to fund on-campus organizations and activities run by students, such as the student newspaper and the student government. How to file 1040nr ez No portion of the fee covers personal expenses. How to file 1040nr ez Although labeled as a student activity fee, the fee is required for Kelly's enrollment and attendance at College X and is a qualified expense. How to file 1040nr ez No Double Benefit Allowed You cannot do any of the following. How to file 1040nr ez Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim an American opportunity credit based on those same expenses. How to file 1040nr ez Claim an American opportunity credit in the same year that you are claiming a tuition and fees deduction for the same student. How to file 1040nr ez Claim an American opportunity credit for any student and use any of that student's expenses in figuring your lifetime learning credit. How to file 1040nr ez Figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP) using the same expenses you used to figure the American opportunity credit. How to file 1040nr ez See Coordination With American Opportunity and Lifetime Learning Credits in chapter 7, Coverdell Education Savings Account, and Coordination With American Opportunity and Lifetime Learning Credits in chapter 8, Qualified Tuition Program. How to file 1040nr ez Claim a credit based on qualified education expenses paid with tax-free educational assistance, such as a scholarship, grant, or assistance provided by an employer. How to file 1040nr ez See Adjustments to Qualified Education Expenses, next. How to file 1040nr ez Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. How to file 1040nr ez The result is the amount of adjusted qualified education expenses for each student. How to file 1040nr ez Tax-free educational assistance. How to file 1040nr ez   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. How to file 1040nr ez See Academic period, earlier. How to file 1040nr ez   Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. How to file 1040nr ez 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). How to file 1040nr ez   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. How to file 1040nr ez 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. How to file 1040nr ez   Tax-free educational assistance includes: The tax-free parts of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions). How to file 1040nr ez Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. How to file 1040nr ez Generally, any scholarship or fellowship is treated as tax free. How to file 1040nr ez However, a scholarship or fellowship is not treated as tax free to the extent the student includes it in gross income (if the student is required to file a tax return for the year the scholarship or fellowship is received) and either of the following is true. How to file 1040nr ez The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. How to file 1040nr ez The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. How to file 1040nr ez You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year it is received. How to file 1040nr ez For examples, see Coordination with Pell grants and other scholarships, later. How to file 1040nr ez Refunds. How to file 1040nr ez   A refund of qualified education expenses may reduce adjusted qualified education expenses for the tax year or require repayment (recapture) of a credit claimed in an earlier year. How to file 1040nr ez Some tax-free educational assistance received after 2013 may be treated as a refund. How to file 1040nr ez See Tax-free educational assistance, earlier. How to file 1040nr ez Refunds received in 2013. How to file 1040nr ez   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses for 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. How to file 1040nr ez Refunds received after 2013 but before your income tax return is filed. How to file 1040nr ez   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid before you file an income tax return for 2013, the amount of qualified education expenses for 2013 is reduced by the amount of the refund. How to file 1040nr ez Refunds received after 2013 and after your income tax return is filed. How to file 1040nr ez   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid after you file an income tax return for 2013, you may need to repay some or all of the credit. How to file 1040nr ez See Credit recapture, next. How to file 1040nr ez Credit recapture. How to file 1040nr ez    If any tax-free educational assistance for the qualified education expenses paid in 2013, or any refund of your qualified education expenses paid in 2013, is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. How to file 1040nr ez You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. How to file 1040nr ez You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you claimed the refigured credit(s). How to file 1040nr ez Include that amount as an additional tax for the year the refund or tax-free assistance was received. How to file 1040nr ez Example. How to file 1040nr ez   You paid $7,000 tuition and fees in August 2013, and your child began college in September 2013. How to file 1040nr ez You filed your 2013 tax return on February 17, 2014, and claimed an American opportunity credit of $2,500. How to file 1040nr ez After you filed your return, you received a refund of $4,000. How to file 1040nr ez You must refigure your 2013 American opportunity credit using $3,000 of qualified education expenses instead of $7,000. How to file 1040nr ez The refigured credit is $2,250. How to file 1040nr ez The increase to your tax liability is also $250. How to file 1040nr ez Include the difference of $250 as additional tax on your 2014 tax return. How to file 1040nr ez See the instructions for your 2014 income tax return to determine where to include this tax. How to file 1040nr ez If you pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. How to file 1040nr ez Amounts that do not reduce qualified education expenses. How to file 1040nr ez   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. How to file 1040nr ez   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. How to file 1040nr ez The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. How to file 1040nr ez The use of the money is not restricted. How to file 1040nr ez Example 1. How to file 1040nr ez Joan paid $3,000 for tuition and $5,000 for room and board at University X. How to file 1040nr ez The university did not require her to pay any fees in addition to her tuition in order to enroll in or attend classes. How to file 1040nr ez To help pay these costs, she was awarded a $2,000 scholarship and a $4,000 student loan. How to file 1040nr ez The terms of the scholarship state that it can be used to pay any of Joan's college expenses. How to file 1040nr ez University X applies the $2,000 scholarship against Joan's $8,000 total bill, and Joan pays the $6,000 balance of her bill from University X with a combination of her student loan and her savings. How to file 1040nr ez Joan does not report any portion of the scholarship as income on her tax return. How to file 1040nr ez In figuring the amount of either education credit (American opportunity or lifetime learning), Joan must reduce her qualified education expenses by the amount of the scholarship ($2,000) because she excluded the entire scholarship from her income. How to file 1040nr ez The student loan is not tax-free educational assistance, so she does not need to reduce her qualified expenses by any part of the loan proceeds. How to file 1040nr ez Joan is treated as having paid $1,000 in qualified education expenses ($3,000 tuition – $2,000 scholarship). How to file 1040nr ez Example 2. How to file 1040nr ez The facts are the same as in Example 1, except that Joan reports her entire scholarship as income on her tax return. How to file 1040nr ez Because Joan reported the entire $2,000 scholarship in her income, she does not need to reduce her qualified education expenses. How to file 1040nr ez Joan is treated as having paid $3,000 in qualified education expenses. How to file 1040nr ez Coordination with Pell grants and other scholarships. How to file 1040nr ez   In some cases, you may be able to reduce your tax liability by including scholarships in income. How to file 1040nr ez If you are claiming an education credit for a claimed dependent who received a scholarship, you may be able to reduce your tax liability if the student includes the scholarship in income. How to file 1040nr ez The scholarship must be one that may (by its terms) be applied to expenses (such as room and board) other than qualified education expenses. How to file 1040nr ez Example 1—No scholarship. How to file 1040nr ez Bill Pass, age 28 and unmarried, enrolled full-time in 2013 as a first-year student at a local college to earn a degree in law enforcement. How to file 1040nr ez This was his first year of postsecondary education. How to file 1040nr ez During 2013, he paid $5,600 for his qualified education expenses and $4,400 for his room and board for the fall 2013 semester. How to file 1040nr ez He and the college meet all the requirements for the American opportunity credit. How to file 1040nr ez Bill's AGI and his MAGI, for purposes of figuring his credit, are $30,000. How to file 1040nr ez Bill takes the standard deduction of $5,950 and personal exemption of $3,800, reducing his AGI to taxable income of $20,250. How to file 1040nr ez His income tax liability, before credits, is $2,599 and Bill claims no credits other than the American opportunity credit. How to file 1040nr ez He figures his American opportunity credit based on qualified education expenses of $4,000, which results in a credit of $2,500 and tax after credits of $99. How to file 1040nr ez Example 2—Scholarship excluded from income. How to file 1040nr ez The facts are the same as in Example 1—No scholarship, except that Bill was awarded a $5,600 scholarship. How to file 1040nr ez Under the terms of his scholarship, it may be used to pay any educational expenses, including room and board. How to file 1040nr ez If Bill excludes the scholarship from income, he will be deemed (for purposes of computing his education credit) to have used the scholarship to pay for tuition, required fees, and course materials. How to file 1040nr ez His adjusted qualified education expenses will be zero and he will not have an education credit. How to file 1040nr ez Therefore, Bill's tax after credits would be $2,599. How to file 1040nr ez Example 3—Scholarship partially included in income. How to file 1040nr ez The facts are the same as in Example 2—Scholarship excluded from income. How to file 1040nr ez If, unlike Example 2, Bill includes $4,000 of the scholarship in income, he will be deemed to have used that amount to pay for room and board. How to file 1040nr ez The remaining $1,600 of the $5,600 scholarship will reduce his qualified education expenses and his adjusted qualified education expenses will be $4,000. How to file 1040nr ez Bill's AGI will increase to $34,000, his taxable income will increase to $24,250, and his tax before credits will increase to $3,199. How to file 1040nr ez Based on his adjusted qualified education expenses of $4,000, Bill would be able to claim an American opportunity tax credit of $2,500 and his tax after credits would be $699. How to file 1040nr ez 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. How to file 1040nr ez This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. How to file 1040nr ez Sports, games, hobbies, and noncredit courses. How to file 1040nr ez   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. How to file 1040nr ez However, if the course of instruction or other education is part of the student's degree program, these expenses can qualify. How to file 1040nr ez Comprehensive or bundled fees. How to file 1040nr ez   Some eligible educational institutions combine all of their fees for an academic period into one amount. How to file 1040nr ez 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 earlier, contact the institution. How to file 1040nr ez 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. How to file 1040nr ez See Figuring the Credit , later, for more information about Form 1098-T. How to file 1040nr ez Who Is an Eligible Student To claim the American opportunity credit, the student for whom you pay qualified education expenses must be an eligible student. How to file 1040nr ez This is a student who meets all of the following requirements. How to file 1040nr ez The student did not have expenses that were used to figure an American opportunity credit in any 4 earlier tax years. How to file 1040nr ez This includes any tax year(s) in which you claimed the Hope Scholarship Credit for the same student. How to file 1040nr ez The student had not completed the first 4 years of postsecondary education (generally, the freshman, sophomore, junior, and senior years of college) before 2013. How to file 1040nr ez For at least one academic period beginning in 2013, the student was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. How to file 1040nr ez The student has not been convicted of any federal or state felony for possessing or distributing a controlled substance as of the end of 2013. How to file 1040nr ez These requirements are also shown in Figure 2-2, Who is an Eligible Student for the American Opportunity Credit , later. How to file 1040nr ez Completion of first 4 years. How to file 1040nr ez   A student has completed the first 4 years of postsecondary education if the institution at which the student is enrolled awards the student 4 years of academic credit at that institution for coursework completed by the student before 2013. How to file 1040nr ez This student generally would not be an eligible student for purposes of the American opportunity credit. How to file 1040nr ez Exception. How to file 1040nr ez   Any academic credit awarded solely on the basis of the student's performance on proficiency examinations is disregarded in determining whether the student has completed 4 years of postsecondary education. How to file 1040nr ez Enrolled at least half-time. How to file 1040nr ez   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. How to file 1040nr ez   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. How to file 1040nr ez However, the standard may not be lower than any of those established by the U. How to file 1040nr ez S. How to file 1040nr ez Department of Education under the Higher Education Act of 1965. How to file 1040nr ez Please click here for the text description of the image. How to file 1040nr ez Figure 2-2 Example 1. How to file 1040nr ez Mack graduated from high school in June 2012. How to file 1040nr ez In September, he enrolled in an undergraduate degree program at College U, and attended full-time for both the 2012 fall and 2013 spring semesters. How to file 1040nr ez For the 2013 fall semester, Mack was enrolled less than half-time. How to file 1040nr ez Because Mack was enrolled in an undergraduate degree program on at least a half-time basis for at least one academic period that began during 2012 and at least one academic period that began during 2013, he is an eligible student for tax years 2012 and 2013 (including the 2013 fall semester when he enrolled at College U on less than a half-time basis). How to file 1040nr ez Example 2. How to file 1040nr ez After taking classes at College V on a part-time basis for a few years, Shelly became a full-time student for the 2013 spring semester. How to file 1040nr ez College V classified Shelly as a second-semester senior (fourth year) for the 2013 spring semester and as a first-semester graduate student (fifth year) for the 2013 fall semester. How to file 1040nr ez Because College V did not classify Shelly as having completed the first 4 years of postsecondary education as of the beginning of 2013, Shelly is an eligible student for tax year 2013. How to file 1040nr ez Therefore, the qualified education expenses paid for the 2013 spring semester and the 2013 fall semester are taken into account in calculating the American opportunity credit for 2013. How to file 1040nr ez Example 3. How to file 1040nr ez During the 2012 fall semester, Larry was a high school student who took classes on a half-time basis at College X. How to file 1040nr ez Larry was not enrolled as part of a degree program at College X because College X only admits students to a degree program if they have a high school diploma or equivalent. How to file 1040nr ez Because Larry was not enrolled in a degree program at College X during 2012, Larry was not an eligible student for tax year 2012. How to file 1040nr ez Example 4. How to file 1040nr ez The facts are the same as in Example 3. How to file 1040nr ez During the 2013 spring semester, Larry again attended College X but not as part of a degree program. How to file 1040nr ez Larry graduated from high school in June 2013. How to file 1040nr ez For the 2013 fall semester, Larry enrolled as a full-time student in College X as part of a degree program, and College X awarded Larry credit for his prior coursework at College X. How to file 1040nr ez Because Larry was enrolled in a degree program at College X for the 2013 fall term on at least a half-time basis, Larry is an eligible student for all of tax year 2013. How to file 1040nr ez Therefore, the qualified education expenses paid for classes taken at College X during both the 2013 spring semester (during which Larry was not enrolled in a degree program) and the 2013 fall semester are taken into account in computing any American opportunity credit. How to file 1040nr ez Example 5. How to file 1040nr ez Dee graduated from high school in June 2012. How to file 1040nr ez In January 2013, Dee enrolled in a 1-year postsecondary certificate program on a full-time basis to obtain a certificate as a travel agent. How to file 1040nr ez Dee completed the program in December 2013, and was awarded a certificate. How to file 1040nr ez In January 2014, she enrolled in a 1-year postsecondary certificate program on a full-time basis to obtain a certificate as a computer programmer. How to file 1040nr ez Dee is an eligible student for both tax years 2013 and 2014 because she meets the degree requirement, the work load requirement, and the year of study requirement for those years. How to file 1040nr ez Who Can Claim a Dependent's Expenses If there are qualified education expenses for your dependent during a tax year, either you or your dependent, but not both of you, can claim an American opportunity credit for your dependent's expenses for that year. How to file 1040nr ez For you to claim an American opportunity credit for your dependent's expenses, you must also claim an exemption for your dependent. How to file 1040nr ez You do this by listing your dependent's name and other required information on Form 1040 (or Form 1040A), line 6c. How to file 1040nr ez IF you. How to file 1040nr ez . How to file 1040nr ez . How to file 1040nr ez THEN only. How to file 1040nr ez . How to file 1040nr ez . How to file 1040nr ez claim an exemption on  your tax return for a  dependent who is an  eligible student you can claim the American opportunity credit based on that dependent's expenses. How to file 1040nr ez The dependent cannot claim the credit. How to file 1040nr ez do not claim an exemption on your tax return for a dependent who is an eligible student (even if entitled to the exemption) the dependent can claim the American opportunity credit. How to file 1040nr ez You cannot claim the credit based on this dependent's expenses. How to file 1040nr ez Expenses paid by dependent. How to file 1040nr ez   If you claim an exemption on your tax return for an eligible student who is your dependent, treat any expenses paid (or deemed paid) by your dependent as if you had paid them. How to file 1040nr ez Include these expenses when figuring the amount of your American opportunity credit. How to file 1040nr ez    Qualified education expenses paid directly to an eligible educational institution for your dependent under a court-approved divorce decree are treated as paid by your dependent. How to file 1040nr ez Expenses paid by you. How to file 1040nr ez   If you claim an exemption for a dependent who is an eligible student, only you can include any expenses you paid when figuring the amount of the American opportunity credit. How to file 1040nr ez If neither you nor anyone else claims an exemption for the dependent, only the dependent can include any expenses you paid when figuring the American opportunity credit. How to file 1040nr ez Expenses paid by others. How to file 1040nr ez   Someone other than you, your spouse, or your dependent (such as a relative or former spouse) may make a payment directly to an eligible educational institution to pay for an eligible student's qualified education expenses. How to file 1040nr ez In this case, the student is treated as receiving the payment from the other person and, in turn, paying the institution. How to file 1040nr ez If you claim an exemption on your tax return for the student, you are considered to have paid the expenses. How to file 1040nr ez Example. How to file 1040nr ez In 2013, Ms. How to file 1040nr ez Allen makes a payment directly to an eligible educational institution for her grandson Todd's qualified education expenses. How to file 1040nr ez For purposes of claiming an American opportunity credit, Todd is treated as receiving the money from his grandmother and, in turn, paying his qualified education expenses himself. How to file 1040nr ez Unless an exemption for Todd is claimed on someone else's 2013 tax return, only Todd can use the payment to claim an American opportunity credit. How to file 1040nr ez If anyone, such as Todd's parents, claims an exemption for Todd on his or her 2013 tax return, whoever claims the exemption may be able to use the expenses to claim an American opportunity credit. How to file 1040nr ez If anyone else claims an exemption for Todd, Todd cannot claim an American opportunity credit. How to file 1040nr ez Tuition reduction. How to file 1040nr ez    When an eligible educational institution provides a reduction in tuition to an employee of the institution (or spouse or dependent child of an employee), the amount of the reduction may or may not be taxable. How to file 1040nr ez If it is taxable, the employee is treated as receiving a payment of that amount and, in turn, paying it to the educational institution on behalf of the student. How to file 1040nr ez For more information on tuition reductions, see Qualified Tuition Reduction in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. How to file 1040nr ez Figuring the Credit The amount of the American opportunity credit (per eligible student) is the sum of: 100% of the first $2,000 of qualified education expenses you paid for the eligible student, and 25% of the next $2,000 of qualified education expenses you paid for that student. How to file 1040nr ez The maximum amount of American opportunity credit you can claim in 2013 is $2,500 multiplied by the number of eligible students. How to file 1040nr ez You can claim the full $2,500 for each eligible student for whom you paid at least $4,000 of adjusted qualified education expenses. How to file 1040nr ez However, the credit may be reduced based on your MAGI. How to file 1040nr ez See Effect of the Amount of Your Income on the Amount of Your Credit , later. How to file 1040nr ez Example. How to file 1040nr ez Jack and Kay Ford are married and file a joint tax return. How to file 1040nr ez For 2013, they claim an exemption for their dependent daughter on their tax return. How to file 1040nr ez Their MAGI is $70,000. How to file 1040nr ez Their daughter is in her junior (third) year of studies at the local university. How to file 1040nr ez Jack and Kay paid qualified education expenses of $4,300 in 2013. How to file 1040nr ez Jack and Kay, their daughter, and the local university meet all of the requirements for the American opportunity credit. How to file 1040nr ez Jack and Kay can claim a $2,500 American opportunity credit in 2013. How to file 1040nr ez This is 100% of the first $2,000 of qualified education expenses, plus 25% of the next $2,000. How to file 1040nr ez Form 1098-T. How to file 1040nr ez   To help you figure your American opportunity credit, the student should receive Form 1098-T, Tuition Statement. How to file 1040nr ez 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. How to file 1040nr ez An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. How to file 1040nr ez However, the amounts in boxes 1 and 2 of Form 1098-T might be different than what you paid. How to file 1040nr ez When figuring the credit, use only the amounts you paid or are deemed to have paid in 2013 for qualified education expenses. How to file 1040nr ez   In addition, Form 1098-T should give other information for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements or refunds, and whether the student was enrolled at least half-time or was a graduate student. How to file 1040nr ez    The eligible educational institution may ask for a completed Form W-9S, Request for Student's or Borrower's Taxpayer Identification Number and Certification, or similar statement to obtain the student's name, address, and taxpayer identification number. How to file 1040nr ez Effect of the Amount of Your Income on the Amount of Your Credit The amount of your American opportunity credit is phased out (gradually reduced) if your MAGI is between $80,000 and $90,000 ($160,000 and $180,000 if you file a joint return). How to file 1040nr ez You cannot claim an American opportunity credit if your MAGI is $90,000 or more ($180,000 or more if you file a joint return). How to file 1040nr ez Modified adjusted gross income (MAGI). How to file 1040nr ez   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return. How to file 1040nr ez MAGI when using Form 1040A. How to file 1040nr ez   If you file Form 1040A, your MAGI is the AGI on line 22 of that form. How to file 1040nr ez MAGI when using Form 1040. How to file 1040nr ez   If you file Form 1040, your MAGI is the AGI on line 38 of that form, 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. How to file 1040nr ez You can use Worksheet 2-1, next, to figure your MAGI. How to file 1040nr ez    Worksheet 2-1. How to file 1040nr ez MAGI for the American Opportunity Credit 1. How to file 1040nr ez Enter your adjusted gross income  (Form 1040, line 38)   1. How to file 1040nr ez   2. How to file 1040nr ez Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   2. How to file 1040nr ez       3. How to file 1040nr ez Enter your foreign housing deduction (Form 2555, line 50)   3. How to file 1040nr ez       4. How to file 1040nr ez Enter the amount of income from Puerto Rico you are excluding   4. How to file 1040nr ez       5. How to file 1040nr ez Enter the amount of income from American Samoa you are excluding (Form 4563, line 15)   5. How to file 1040nr ez       6. How to file 1040nr ez Add the amounts on lines 2, 3, 4, and 5   6. How to file 1040nr ez   7. How to file 1040nr ez Add the amounts on lines 1 and 6. How to file 1040nr ez  This is your modified adjusted  gross income. How to file 1040nr ez Enter here and  on Form 8863, line 3   7. How to file 1040nr ez   Phaseout. How to file 1040nr ez   If your MAGI is within the range of incomes where the credit must be reduced, you will figure your reduced credit using lines 2-7, of Form 8863, Part I. How to file 1040nr ez The same method is shown in the following example. How to file 1040nr ez Example. How to file 1040nr ez You are filing a joint return and your MAGI is $165,000. How to file 1040nr ez In 2013, you paid $5,000 of qualified education expenses. How to file 1040nr ez You figure a tentative American opportunity credit of $2,500 (100% of the first $2,000 of qualified education expenses, plus 25% of the next $2,000 of qualified education expenses). How to file 1040nr ez Because your MAGI is within the range of incomes where the credit must be reduced, you must multiply your tentative credit ($2,500) by a fraction. How to file 1040nr ez The numerator of the fraction is $180,000 (the upper limit for those filing a joint return) minus your MAGI. How to file 1040nr ez The denominator is $20,000, the range of incomes for the phaseout ($160,000 to $180,000). How to file 1040nr ez The result is the amount of your phased out (reduced) American opportunity credit ($1,875). How to file 1040nr ez      $2,500 × $180,000 − $165,000  $20,000 = $1,875   Refundable Part of Credit Forty percent of the American opportunity credit is refundable for most taxpayers. How to file 1040nr ez However, if you were under age 24 at the end of 2013 and the conditions listed below apply to you, you cannot claim any part of the American opportunity credit as a refundable credit on your tax return. How to file 1040nr ez Instead, your allowed credit (figured on Form 8863, Part II) will be used to reduce your tax as a nonrefundable credit only. How to file 1040nr ez You do not qualify for a refund if items 1 (a, b, or c), 2, and 3 below apply to you. How to file 1040nr ez You were: Under age 18 at the end of 2013, or Age 18 at the end of 2013 and your earned income (defined below) was less than one-half of your support (defined below), or Over age 18 and under age 24 at the end of 2013 and a full-time student (defined below) and your earned income (defined below) was less than one-half of your support (defined below). How to file 1040nr ez At least one of your parents was alive at the end of 2013. How to file 1040nr ez You are filing a return as single, head of household, qualifying widow(er), or married filing separately for 2013. How to file 1040nr ez Earned income. How to file 1040nr ez   Earned income includes wages, salaries, professional fees, and other payments received for personal services actually performed. How to file 1040nr ez Earned income includes the part of any scholarship or fellowship that represents payment for teaching, research, or other services performed by the student that are required as a condition for receiving the scholarship or fellowship. How to file 1040nr ez Earned income does not include that part of the compensation for personal services rendered to a corporation which represents a distribution of earnings or profits rather than a reasonable allowance as compensation for the personal services actually rendered. How to file 1040nr ez   If you are a sole proprietor or a partner in a trade or business in which both personal services and capital are material income-producing factors, earned income also includes a reasonable allowance for compensation for personal services, but not more than 30% of your share of the net profits from that trade or business (after subtracting the deduction for one-half of self-employment tax). How to file 1040nr ez However, if capital is not an income-producing factor and your personal services produced the business income, the 30% limit does not apply. How to file 1040nr ez Support. How to file 1040nr ez   Your support includes food, shelter, clothing, medical and dental care, education, and the like. How to file 1040nr ez Generally, the amount of the item of support will be the amount of expenses incurred by the one furnishing such item. How to file 1040nr ez If the item of support is in the form of property or lodging, measure the amount of such item of support by its fair market value. How to file 1040nr ez However, a scholarship received by you is not considered support if you are a full-time student. How to file 1040nr ez See Publication 501 for details. How to file 1040nr ez Full-time student. How to file 1040nr ez   You are a full-time student for 2013 if during any part of any 5 calendar months during the year you were enrolled as a full-time student at an eligible educational institution (defined earlier), or took a full-time, on-farm training course given by such an institution or by a state, county, or local government agency. How to file 1040nr ez Claiming the Credit You claim the American opportunity credit by completing Form 8863 and submitting it with your Form 1040 or 1040A. How to file 1040nr ez Enter the nonrefundable part of the credit on Form 1040, line 49, or on Form 1040A, line 31. How to file 1040nr ez Enter the refundable part of the credit on Form 1040, line 66, or on Form 1040A, line 40. How to file 1040nr ez A filled-in Form 8863 is shown at the end of this publication. How to file 1040nr ez Note. How to file 1040nr ez In Appendix A. How to file 1040nr ez at the end of this publication, there is an example illustrating the use of Form 8863 when both the American opportunity credit and the lifetime learning credit are claimed on the same tax return. How to file 1040nr ez Prev  Up  Next   Home   More Online Publications