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How To Fill Out Amended Tax Return

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How To Fill Out Amended Tax Return

How to fill out amended tax return 6. How to fill out amended tax return   Insurance Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Deductible PremiumsSelf-Employed Health Insurance Deduction Nondeductible Premiums Capitalized Premiums When To Deduct Premiums What's New Retiree drug subsidy. How to fill out amended tax return  Beginning in 2013, sponsors of certain qualified retiree prescription drug plans must account for the subsidy received by reducing the amount of qualified retiree prescription drug plans expense by the subsidy received (taking into account the taxpayer's accounting method). How to fill out amended tax return For more information, see the retiree drug subsidy frequently asked questions on IRS. How to fill out amended tax return gov. How to fill out amended tax return Introduction You generally can deduct the ordinary and necessary cost of insurance as a business expense if it is for your trade, business, or profession. How to fill out amended tax return However, you may have to capitalize certain insurance costs under the uniform capitalization rules. How to fill out amended tax return For more information, see Capitalized Premiums , later. How to fill out amended tax return Topics - This chapter discusses: Deductible premiums Nondeductible premiums Capitalized premiums When to deduct premiums Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 525 Taxable and Nontaxable Income 538 Accounting Periods and Methods 547 Casualties, Disasters, and Thefts Form (and Instructions) 1040 U. How to fill out amended tax return S. How to fill out amended tax return Individual Income Tax Return See chapter 12 for information about getting publications and forms. How to fill out amended tax return Deductible Premiums You generally can deduct premiums you pay for the following kinds of insurance related to your trade or business. How to fill out amended tax return Insurance that covers fire, storm, theft, accident, or similar losses. How to fill out amended tax return Credit insurance that covers losses from business bad debts. How to fill out amended tax return Group hospitalization and medical insurance for employees, including long-term care insurance. How to fill out amended tax return If a partnership pays accident and health insurance premiums for its partners, it generally can deduct them as guaranteed payments to partners. How to fill out amended tax return If an S corporation pays accident and health insurance premiums for its more-than-2% shareholder-employees, it generally can deduct them, but must also include them in the shareholder's wages subject to federal income tax withholding. How to fill out amended tax return See Publication 15-B. How to fill out amended tax return Liability insurance. How to fill out amended tax return Malpractice insurance that covers your personal liability for professional negligence resulting in injury or damage to patients or clients. How to fill out amended tax return Workers' compensation insurance set by state law that covers any claims for bodily injuries or job-related diseases suffered by employees in your business, regardless of fault. How to fill out amended tax return If a partnership pays workers' compensation premiums for its partners, it generally can deduct them as guaranteed payments to partners. How to fill out amended tax return If an S corporation pays workers' compensation premiums for its more-than-2% shareholder-employees, it generally can deduct them, but must also include them in the shareholder's wages. How to fill out amended tax return Contributions to a state unemployment insurance fund are deductible as taxes if they are considered taxes under state law. How to fill out amended tax return Overhead insurance that pays for business overhead expenses you have during long periods of disability caused by your injury or sickness. How to fill out amended tax return Car and other vehicle insurance that covers vehicles used in your business for liability, damages, and other losses. How to fill out amended tax return If you operate a vehicle partly for personal use, deduct only the part of the insurance premium that applies to the business use of the vehicle. How to fill out amended tax return If you use the standard mileage rate to figure your car expenses, you cannot deduct any car insurance premiums. How to fill out amended tax return Life insurance covering your officers and employees if you are not directly or indirectly a beneficiary under the contract. How to fill out amended tax return Business interruption insurance that pays for lost profits if your business is shut down due to a fire or other cause. How to fill out amended tax return Self-Employed Health Insurance Deduction You may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for yourself, your spouse, and your dependents. How to fill out amended tax return The insurance can also cover your child who was under age 27 at the end of 2013, even if the child was not your dependent. How to fill out amended tax return A child includes your son, daughter, stepchild, adopted child, or foster child. How to fill out amended tax return A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. How to fill out amended tax return One of the following statements must be true. How to fill out amended tax return You were self-employed and had a net profit for the year reported on Schedule C (Form 1040), Profit or Loss From Business; Schedule C-EZ (Form 1040), Net Profit From Business; or Schedule F (Form 1040), Profit or Loss From Farming. How to fill out amended tax return You were a partner with net earnings from self-employment for the year reported on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. How to fill out amended tax return , box 14, code A. How to fill out amended tax return You used one of the optional methods to figure your net earnings from self-employment on Schedule SE. How to fill out amended tax return You received wages in 2013 from an S corporation in which you were a more-than-2% shareholder. How to fill out amended tax return Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2, Wage and Tax Statement. How to fill out amended tax return The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business. How to fill out amended tax return For self-employed individuals filing a Schedule C, C-EZ, or F, a policy can be either in the name of the business or in the name of the individual. How to fill out amended tax return For partners, a policy can be either in the name of the partnership or in the name of the partner. How to fill out amended tax return You can either pay the premiums yourself or your partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. How to fill out amended tax return However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. How to fill out amended tax return Otherwise, the insurance plan will not be considered to be established under your business. How to fill out amended tax return For more-than-2% shareholders, a policy can be either in the name of the S corporation or in the name of the shareholder. How to fill out amended tax return You can either pay the premiums yourself or your S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. How to fill out amended tax return However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 as wages to be included in your gross income. How to fill out amended tax return Otherwise, the insurance plan will not be considered to be established under your business. How to fill out amended tax return Medicare premiums you voluntarily pay to obtain insurance in your name that is similar to qualifying private health insurance can be used to figure the deduction. How to fill out amended tax return If you previously filed returns without using Medicare premiums to figure the deduction, you can file timely amended returns to refigure the deduction. How to fill out amended tax return For more information, see Form 1040X, Amended U. How to fill out amended tax return S. How to fill out amended tax return Individual Income Tax Return. How to fill out amended tax return Amounts paid for health insurance coverage from retirement plan distributions that were nontaxable because you are a retired public safety officer cannot be used to figure the deduction. How to fill out amended tax return Take the deduction on Form 1040, line 29. How to fill out amended tax return Qualified long-term care insurance. How to fill out amended tax return   You can include premiums paid on a qualified long-term care insurance contract when figuring your deduction. How to fill out amended tax return But, for each person covered, you can include only the smaller of the following amounts. How to fill out amended tax return The amount paid for that person. How to fill out amended tax return The amount shown below. How to fill out amended tax return Use the person's age at the end of the tax year. How to fill out amended tax return Age 40 or younger–$360 Age 41 to 50–$680 Age 51 to 60–$1,360 Age 61 to 70–$3,640 Age 71 or older–$4,550 Qualified long-term care insurance contract. How to fill out amended tax return   A qualified long-term care insurance contract is an insurance contract that only provides coverage of qualified long-term care services. How to fill out amended tax return The contract must meet all the following requirements. How to fill out amended tax return It must be guaranteed renewable. How to fill out amended tax return It must provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract may be used only to reduce future premiums or increase future benefits. How to fill out amended tax return It must not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed. How to fill out amended tax return It generally must not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer or the contract makes per diem or other periodic payments without regard to expenses. How to fill out amended tax return Qualified long-term care services. How to fill out amended tax return   Qualified long-term care services are: Necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and Maintenance or personal care services. How to fill out amended tax return The services must be required by a chronically ill individual and prescribed by a licensed health care practitioner. How to fill out amended tax return Worksheet 6-A. How to fill out amended tax return Self-Employed Health Insurance Deduction Worksheet Note. How to fill out amended tax return Use a separate worksheet for each trade or business under which an insurance plan is established. How to fill out amended tax return 1. How to fill out amended tax return Enter the total amount paid in 2013 for health insurance coverage established under your business for 2013 for you, your spouse, and your dependents. How to fill out amended tax return Your insurance can also cover your child who was under age 27 at the end of 2013, even if the child was not your dependent. How to fill out amended tax return But do not include the following. How to fill out amended tax return   Amounts for any month you were eligible to participate in a health plan subsidized by your or your spouse's employer or the employer of either your dependent or your child who was under the age of 27 at the end of 2013. How to fill out amended tax return Any amounts paid from retirement plan distributions that were nontaxable because you are a retired public safety officer. How to fill out amended tax return Any amounts you included on Form 8885, line 4. How to fill out amended tax return Any qualified health insurance premiums you paid to “U. How to fill out amended tax return S. How to fill out amended tax return Treasury-HCTC. How to fill out amended tax return ” Any health coverage tax credit advance payments shown in box 1 of Form 1099-H. How to fill out amended tax return Any payments for qualified long-term care insurance (see line 2) 1. How to fill out amended tax return   2. How to fill out amended tax return For coverage under a qualified long-term care insurance contract, enter for each person covered the smaller of the following amounts. How to fill out amended tax return       a) Total payments made for that person during the year. How to fill out amended tax return       b) The amount shown below. How to fill out amended tax return Use the person's age at the end of the tax year. How to fill out amended tax return         $360— if that person is age 40 or younger          $680— if age 41 to 50         $1,360— if age 51 to 60         $3,640— if age 61 to 70         $4,550— if age 71 or older         Do not include payments for any month you were eligible to participate in a long-term care insurance plan subsidized by your or your spouse’s employer or the employer of either your dependent or your child who was under the age of 27 at the end of 2013. How to fill out amended tax return If more than one person is covered, figure separately the amount to enter for each person. How to fill out amended tax return Then enter the total of those amounts 2. How to fill out amended tax return   3. How to fill out amended tax return Add lines 1 and 2 3. How to fill out amended tax return   4. How to fill out amended tax return Enter your net profit* and any other earned income** from the trade or business under which the insurance plan is established. How to fill out amended tax return Do not include Conservation Reserve Program payments exempt from self-employment tax. How to fill out amended tax return If the business is an S corporation, skip to line 11 4. How to fill out amended tax return   5. How to fill out amended tax return Enter the total of all net profits* from: Schedule C (Form 1040), line 31; Schedule C-EZ (Form 1040), line 3; Schedule F (Form 1040), line 34; or Schedule K-1 (Form 1065), box 14, code A; plus any other income allocable to the profitable businesses. How to fill out amended tax return Do not include Conservation Reserve Program payments exempt from self-employment tax. How to fill out amended tax return See the Instructions for Schedule SE (Form 1040). How to fill out amended tax return Do not include any net losses shown on these schedules. How to fill out amended tax return 5. How to fill out amended tax return   6. How to fill out amended tax return Divide line 4 by line 5 6. How to fill out amended tax return   7. How to fill out amended tax return Multiply Form 1040, line 27, by the percentage on line 6 7. How to fill out amended tax return   8. How to fill out amended tax return Subtract line 7 from line 4 8. How to fill out amended tax return   9. How to fill out amended tax return Enter the amount, if any, from Form 1040, line 28, attributable to the same trade or business in which the insurance plan is established 9. How to fill out amended tax return   10. How to fill out amended tax return Subtract line 9 from line 8 10. How to fill out amended tax return   11. How to fill out amended tax return Enter your Medicare wages (Form W-2, box 5) from an S corporation in which you are a more-than-2% shareholder and in which the insurance plan is established 11. How to fill out amended tax return   12. How to fill out amended tax return Enter any amount from Form 2555, line 45, attributable to the amount entered on line 4 or 11 above, or any amount from Form 2555-EZ, line 18, attributable to the amount entered on line 11 above 12. How to fill out amended tax return   13. How to fill out amended tax return Subtract line 12 from line 10 or 11, whichever applies 13. How to fill out amended tax return   14. How to fill out amended tax return Enter the smaller of line 3 or line 13 here and on Form 1040, line 29. How to fill out amended tax return Do not include this amount when figuring any medical expense deduction on Schedule A (Form 1040). How to fill out amended tax return 14. How to fill out amended tax return   * If you used either optional method to figure your net earnings from self-employment from any business, do not enter your net profit from the business. How to fill out amended tax return Instead, enter the amount attributable to that business from Schedule SE (Form 1040), Section B, line 4b. How to fill out amended tax return * *Earned income includes net earnings and gains from the sale, transfer, or licensing of property you created. How to fill out amended tax return However, it does not include capital gain income. How to fill out amended tax return Chronically ill individual. How to fill out amended tax return   A chronically ill individual is a person who has been certified as one of the following. How to fill out amended tax return An individual who has been unable, due to loss of functional capacity for at least 90 days, to perform at least two activities of daily living without substantial assistance from another individual. How to fill out amended tax return Activities of daily living are eating, toileting, transferring (general mobility), bathing, dressing, and continence. How to fill out amended tax return An individual who requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. How to fill out amended tax return The certification must have been made by a licensed health care practitioner within the previous 12 months. How to fill out amended tax return Benefits received. How to fill out amended tax return   For information on excluding benefits you receive from a long-term care contract from gross income, see Publication 525. How to fill out amended tax return Other coverage. How to fill out amended tax return   You cannot take the deduction for any month you were eligible to participate in any employer (including your spouse's) subsidized health plan at any time during that month, even if you did not actually participate. How to fill out amended tax return In addition, if you were eligible for any month or part of a month to participate in any subsidized health plan maintained by the employer of either your dependent or your child who was under age 27 at the end of 2013, do not use amounts paid for coverage for that month to figure the deduction. How to fill out amended tax return   These rules are applied separately to plans that provide long-term care insurance and plans that do not provide long-term care insurance. How to fill out amended tax return However, any medical insurance payments not deductible on Form 1040, line 29, can be included as medical expenses on Schedule A (Form 1040), Itemized Deductions, if you itemize deductions. How to fill out amended tax return Effect on itemized deductions. How to fill out amended tax return   Subtract the health insurance deduction from your medical insurance when figuring medical expenses on Schedule A (Form 1040) if you itemize deductions. How to fill out amended tax return Effect on self-employment tax. How to fill out amended tax return   For tax years beginning before or after 2010, you cannot subtract the self-employed health insurance deduction when figuring net earnings for your self-employment tax from the business under which the insurance plan is established, or considered to be established as discussed earlier. How to fill out amended tax return For more information, see Schedule SE (Form 1040). How to fill out amended tax return How to figure the deduction. How to fill out amended tax return   Generally, you can use the worksheet in the Form 1040 instructions to figure your deduction. How to fill out amended tax return However, if any of the following apply, you must use Worksheet 6-A in this chapter. How to fill out amended tax return You had more than one source of income subject to self-employment tax. How to fill out amended tax return You file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. How to fill out amended tax return You are using amounts paid for qualified long-term care insurance to figure the deduction. How to fill out amended tax return If you are claiming the health coverage tax credit, complete Form 8885, Health Coverage Tax Credit, before you figure this deduction. How to fill out amended tax return Health coverage tax credit. How to fill out amended tax return   You may be able to take this credit only if you were an eligible trade adjustment assistance (TAA) recipient, alternative TAA (ATAA) recipient, reemployment trade adjustment assistance (RTAA) recipient, or Pension Benefit Guaranty Corporation (PBGC) pension recipient. How to fill out amended tax return Use Form 8885 to figure the amount, if any, of this credit. How to fill out amended tax return   When figuring the amount to enter on line 1 of Worksheet 6-A, do not include the following. How to fill out amended tax return Any amounts you included on Form 8885, line 4. How to fill out amended tax return Any qualified health insurance premiums you paid to “U. How to fill out amended tax return S. How to fill out amended tax return Treasury-HCTC. How to fill out amended tax return ” Any health coverage tax credit advance payments shown in box 1 of Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments. How to fill out amended tax return More than one health plan and business. How to fill out amended tax return   If you have more than one health plan during the year and each plan is established under a different business, you must use separate worksheets (Worksheet 6-A) to figure each plan's net earnings limit. How to fill out amended tax return Include the premium you paid under each plan on line 1 or line 2 of that separate worksheet and your net profit (or wages) from that business on line 4 (or line 11). How to fill out amended tax return For a plan that provides long-term care insurance, the total of the amounts entered for each person on line 2 of all worksheets cannot be more than the appropriate limit shown on line 2 for that person. How to fill out amended tax return Nondeductible Premiums You cannot deduct premiums on the following kinds of insurance. How to fill out amended tax return Self-insurance reserve funds. How to fill out amended tax return You cannot deduct amounts credited to a reserve set up for self-insurance. How to fill out amended tax return This applies even if you cannot get business insurance coverage for certain business risks. How to fill out amended tax return However, your actual losses may be deductible. How to fill out amended tax return See Publication 547. How to fill out amended tax return Loss of earnings. How to fill out amended tax return You cannot deduct premiums for a policy that pays for lost earnings due to sickness or disability. How to fill out amended tax return However, see the discussion on overhead insurance, item (8), under Deductible Premiums , earlier. How to fill out amended tax return Certain life insurance and annuities. How to fill out amended tax return For contracts issued before June 9, 1997, you cannot deduct the premiums on a life insurance policy covering you, an employee, or any person with a financial interest in your business if you are directly or indirectly a beneficiary of the policy. How to fill out amended tax return You are included among possible beneficiaries of the policy if the policy owner is obligated to repay a loan from you using the proceeds of the policy. How to fill out amended tax return A person has a financial interest in your business if the person is an owner or part owner of the business or has lent money to the business. How to fill out amended tax return For contracts issued after June 8, 1997, you generally cannot deduct the premiums on any life insurance policy, endowment contract, or annuity contract if you are directly or indirectly a beneficiary. How to fill out amended tax return The disallowance applies without regard to whom the policy covers. How to fill out amended tax return Partners. How to fill out amended tax return If, as a partner in a partnership, you take out an insurance policy on your own life and name your partners as beneficiaries to induce them to retain their investments in the partnership, you are considered a beneficiary. How to fill out amended tax return You cannot deduct the insurance premiums. How to fill out amended tax return Insurance to secure a loan. How to fill out amended tax return If you take out a policy on your life or on the life of another person with a financial interest in your business to get or protect a business loan, you cannot deduct the premiums as a business expense. How to fill out amended tax return Nor can you deduct the premiums as interest on business loans or as an expense of financing loans. How to fill out amended tax return In the event of death, the proceeds of the policy are generally not taxed as income even if they are used to liquidate the debt. How to fill out amended tax return Capitalized Premiums Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. How to fill out amended tax return Include these costs in the basis of property you produce or acquire for resale, rather than claiming them as a current deduction. How to fill out amended tax return You recover the costs through depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. How to fill out amended tax return Indirect costs include premiums for insurance on your plant or facility, machinery, equipment, materials, property produced, or property acquired for resale. How to fill out amended tax return Uniform capitalization rules. How to fill out amended tax return   You may be subject to the uniform capitalization rules if you do any of the following, unless the property is produced for your use other than in a business or an activity carried on for profit. How to fill out amended tax return Produce real property or tangible personal property. How to fill out amended tax return For this purpose, tangible personal property includes a film, sound recording, video tape, book, or similar property. How to fill out amended tax return Acquire property for resale. How to fill out amended tax return However, these rules do not apply to the following property. How to fill out amended tax return Personal property you acquire for resale if your average annual gross receipts are $10 million or less for the 3 prior tax years. How to fill out amended tax return Property you produce if you meet either of the following conditions. How to fill out amended tax return Your indirect costs of producing the property are $200,000 or less. How to fill out amended tax return You use the cash method of accounting and do not account for inventories. How to fill out amended tax return More information. How to fill out amended tax return   For more information on these rules, see Uniform Capitalization Rules in Publication 538 and the regulations under Internal Revenue Code section 263A. How to fill out amended tax return When To Deduct Premiums You can usually deduct insurance premiums in the tax year to which they apply. How to fill out amended tax return Cash method. How to fill out amended tax return   If you use the cash method of accounting, you generally deduct insurance premiums in the tax year you actually paid them, even if you incurred them in an earlier year. How to fill out amended tax return However, see Prepayment , later. How to fill out amended tax return Accrual method. How to fill out amended tax return   If you use an accrual method of accounting, you cannot deduct insurance premiums before the tax year in which you incur a liability for them. How to fill out amended tax return In addition, you cannot deduct insurance premiums before the tax year in which you actually pay them (unless the exception for recurring items applies). How to fill out amended tax return For more information about the accrual method of accounting, see chapter 1. How to fill out amended tax return For information about the exception for recurring items, see Publication 538. How to fill out amended tax return Prepayment. How to fill out amended tax return   You cannot deduct expenses in advance, even if you pay them in advance. How to fill out amended tax return This rule applies to any expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. How to fill out amended tax return   Expenses such as insurance are generally allocable to a period of time. How to fill out amended tax return You can deduct insurance expenses for the year to which they are allocable. How to fill out amended tax return Example. How to fill out amended tax return In 2013, you signed a 3-year insurance contract. How to fill out amended tax return Even though you paid the premiums for 2013, 2014, and 2015 when you signed the contract, you can only deduct the premium for 2013 on your 2013 tax return. How to fill out amended tax return You can deduct in 2014 and 2015 the premium allocable to those years. How to fill out amended tax return Dividends received. How to fill out amended tax return   If you receive dividends from business insurance and you deducted the premiums in prior years, at least part of the dividends generally are income. How to fill out amended tax return For more information, see Recovery of amount deducted (tax benefit rule) in chapter 1 under How Much Can I Deduct. How to fill out amended tax return Prev  Up  Next   Home   More Online Publications
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How to fill out amended tax return 10. How to fill out amended tax return   Education Savings Bond Program Table of Contents Introduction Who Can Cash In Bonds Tax FreeAdjusted qualified education expenses. How to fill out amended tax return Eligible educational institution. How to fill out amended tax return Dependent for whom you claim an exemption. How to fill out amended tax return MAGI when using Form 1040A. How to fill out amended tax return MAGI when using Form 1040. How to fill out amended tax return Figuring the Tax-Free AmountEffect of the Amount of Your Income on the Amount of Your Exclusion Claiming the Exclusion Introduction Generally, you must pay tax on the interest earned on U. How to fill out amended tax return S. How to fill out amended tax return savings bonds. How to fill out amended tax return If you do not include the interest in income in the years it is earned, you must include it in your income in the year in which you cash in the bonds. How to fill out amended tax return However, when you cash in certain savings bonds under an education savings bond program, you may be able to exclude the interest from income. How to fill out amended tax return Who Can Cash In Bonds Tax Free You may be able to cash in qualified U. How to fill out amended tax return S. How to fill out amended tax return savings bonds without having to include in your income some or all of the interest earned on the bonds if you meet the following conditions. How to fill out amended tax return You pay qualified education expenses for yourself, your spouse, or a dependent for whom you claim an exemption on your return. How to fill out amended tax return Your modified adjusted gross income (MAGI) is less than the amount specified for your filing status. How to fill out amended tax return Your filing status is not married filing separately. How to fill out amended tax return Qualified U. How to fill out amended tax return S. How to fill out amended tax return savings bonds. How to fill out amended tax return   A qualified U. How to fill out amended tax return S. How to fill out amended tax return savings bond is a series EE bond issued after 1989 or a series I bond. How to fill out amended tax return The bond must be issued either in your name (as the sole owner) or in the name of both you and your spouse (as co-owners). How to fill out amended tax return   The owner must be at least 24 years old before the bond's issue date. How to fill out amended tax return The issue date is printed on the front of the savings bond. How to fill out amended tax return    The issue date is not necessarily the date of purchase—it will be the first day of the month in which the bond is purchased (or posted, if bought electronically). How to fill out amended tax return Qualified education expenses. How to fill out amended tax return   These include the following items you pay for either yourself, your spouse, or a dependent for whom you claim an exemption. How to fill out amended tax return Tuition and fees required to enroll at or attend an eligible educational institution. How to fill out amended tax return Qualified education expenses do not include expenses for room and board or for courses involving sports, games, or hobbies that are not part of a degree or certificate granting program. How to fill out amended tax return Contributions to a qualified tuition program (QTP) (see How Much Can You Contribute in chapter 8, Qualified Tuition Program). How to fill out amended tax return Contributions to a Coverdell education savings account (ESA) (see Contributions in chapter 7, Coverdell Education Savings Account). How to fill out amended tax return Adjusted qualified education expenses. How to fill out amended tax return   You must reduce your qualified education expenses by all of the following tax-free benefits. How to fill out amended tax return Tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions). How to fill out amended tax return Expenses used to figure the tax-free portion of distributions from a Coverdell ESA (see Qualified Education Expenses in chapter 7, Coverdell Education Savings Account). How to fill out amended tax return Expenses used to figure the tax-free portion of distributions from a QTP (see Qualified education expenses in chapter 8, Qualified Tuition Program). How to fill out amended tax return Any tax-free payments (other than gifts or inheritances) received as educational assistance, such as: Veterans' educational assistance benefits (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Qualified tuition reductions (see Qualified Tuition Reduction in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), or Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ). How to fill out amended tax return Any expenses used in figuring the American opportunity and lifetime learning credits. How to fill out amended tax return See What Expenses Qualify in chapter 2, American Opportunity Credit, and What Expenses Qualify in chapter 3, Lifetime Learning Credit, for more information. How to fill out amended tax return Eligible educational institution. How to fill out amended tax return   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 fill out amended tax return S. How to fill out amended tax return Department of Education. How to fill out amended tax return It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. How to fill out amended tax return The educational institution should be able to tell you if it is an eligible educational institution. How to fill out amended tax return   Certain educational institutions located outside the United States also participate in the U. How to fill out amended tax return S. How to fill out amended tax return Department of Education's Federal Student Aid (FSA) programs. How to fill out amended tax return Dependent for whom you claim an exemption. How to fill out amended tax return   You claim an exemption for a person if you list his or her name and other required information on Form 1040 (or Form 1040A), line 6c. How to fill out amended tax return Modified adjusted gross income (MAGI). How to fill out amended tax return   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return without taking into account this interest exclusion. How to fill out amended tax return However, as discussed below, there may be other modifications. How to fill out amended tax return MAGI when using Form 1040A. How to fill out amended tax return   If you file Form 1040A, your MAGI is the AGI on line 22 of that form figured without taking into account any savings bond interest exclusion and modified by adding back any amount on line 18 (student loan interest deduction) and line 19 (tuition and fees deduction). How to fill out amended tax return MAGI when using Form 1040. How to fill out amended tax return   If you file Form 1040, your MAGI is the AGI on line 38 of that form figured without taking into account any savings bond interest exclusion and modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, Exclusion of income by bona fide residents of Puerto Rico, Exclusion for adoption benefits received under an employer's adoption assistance program, Deduction for student loan interest, Deduction for tuition and fees, and Deduction for domestic production activities. How to fill out amended tax return    Use the worksheet in the instructions for line 9 of Form 8815 to figure your MAGI. How to fill out amended tax return If you claim any of the exclusion or deduction items (1)–(6) listed above, add the amount of the exclusion or deduction to the amount on line 5 of the worksheet. How to fill out amended tax return Do not add in the deduction for (7) student loan interest, and (8) tuition and fees, or (9) domestic production activities because line 4 of the worksheet already includes these amounts. How to fill out amended tax return Enter the total on Form 8815, line 9, as your modified adjusted gross income (MAGI). How to fill out amended tax return    Because the deduction for interest expenses attributable to royalties and other investments is limited to your net investment income, you cannot figure the deduction until you have figured this interest exclusion. How to fill out amended tax return Therefore, if you had interest expenses attributable to royalties and deductible on Schedule E (Form 1040), Supplemental Income and Loss, you must make a special computation of your deductible interest without regard to this exclusion to figure the net royalty income included in your MAGI. How to fill out amended tax return See Royalties included in MAGI under Education Savings Bond Program in Publication 550, chapter 1. How to fill out amended tax return Figuring the Tax-Free Amount If the total you receive when you cash in the bonds is not more than the adjusted qualified education expenses for the year, all of the interest on the bonds may be tax free. How to fill out amended tax return However, if the total you receive when you cash in the bonds is more than the adjusted expenses, only part of the interest may be tax free. How to fill out amended tax return To determine the tax-free amount, multiply the interest part of the proceeds by a fraction. How to fill out amended tax return The numerator (top part) of the fraction is the adjusted qualified education expenses (AQEE) you paid during the year. How to fill out amended tax return The denominator (bottom part) of the fraction is the total proceeds you received during the year. How to fill out amended tax return Example. How to fill out amended tax return In February 2013, Mark and Joan Washington, a married couple, cashed a qualified series EE U. How to fill out amended tax return S. How to fill out amended tax return savings bond. How to fill out amended tax return They received proceeds of $9,000, representing principal of $6,000 and interest of $3,000. How to fill out amended tax return In 2013, they paid $7,650 of their daughter's college tuition. How to fill out amended tax return They are not claiming an American opportunity or lifetime learning credit for those expenses, and their daughter does not have any tax-free educational assistance. How to fill out amended tax return Their MAGI for 2013 was $80,000. How to fill out amended tax return   $3,000 interest × $7,650 AQEE  $9,000 proceeds = $2,550 tax-free interest   They can exclude $2,550 of interest in 2013. How to fill out amended tax return They must pay tax on the remaining $450 ($3,000 − $2,550) interest. How to fill out amended tax return Effect of the Amount of Your Income on the Amount of Your Exclusion The amount of your interest exclusion is gradually reduced (phased out) based on your MAGI and filing status. How to fill out amended tax return Claiming the Exclusion Use Form 8815 to figure your education savings bond interest exclusion. How to fill out amended tax return Enter your exclusion on line 3 of Schedule B (Form 1040A or 1040), Interest and Ordinary Dividends. How to fill out amended tax return Attach Form 8815 to your tax return. How to fill out amended tax return Prev  Up  Next   Home   More Online Publications