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Hrblock taxcut 19. Hrblock taxcut   Education- Related Adjustments Table of Contents Introduction Useful Items - You may want to see: Student Loan Interest DeductionStudent Loan Interest Defined Can You Claim the Deduction How Much Can You Deduct How Do You Figure the Deduction Tuition and Fees DeductionCan You Claim the Deduction What Expenses Qualify Who Is an Eligible Student Who Can Claim a Dependent's Expenses How Much Can You Deduct Educator Expenses Introduction This chapter discusses the education-related adjustment you can deduct in figuring your adjusted gross income. Hrblock taxcut This chapter covers the student loan interest deduction, tuition and fees deduction, and the deduction for educator expenses. Hrblock taxcut Useful Items - You may want to see: Publication 970 Tax Benefits for Education Student Loan Interest Deduction Generally, personal interest you pay, other than certain mortgage interest, is not deductible on your tax return. Hrblock taxcut However, if your modified adjusted gross income (MAGI) is less than $75,000 ($155,000 if filing a joint return) there is a special deduction allowed for paying interest on a student loan (also known as an education loan) used for higher education. Hrblock taxcut For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return before subtracting any deduction for student loan interest. Hrblock taxcut This deduction can reduce the amount of your income subject to tax by up to $2,500 in 2013. Hrblock taxcut Table 19-1 summarizes the features of the student loan interest deduction. Hrblock taxcut Table 19-1. Hrblock taxcut Student Loan Interest Deduction at a Glance Do not rely on this table alone. Hrblock taxcut Refer to the text for more details. Hrblock taxcut Feature Description Maximum benefit You can reduce your income subject to tax by up to $2,500. Hrblock taxcut Loan qualifications Your student loan: •  must have been taken out solely to pay qualified education expenses, and   • cannot be from a related person or made under a qualified employer plan. Hrblock taxcut Student qualifications The student must be: • you, your spouse, or your dependent, and   • enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential at an eligible educational institution. Hrblock taxcut Time limit on deduction You can deduct interest paid during the remaining period of your student loan. Hrblock taxcut Phaseout The amount of your deduction depends on your income level. Hrblock taxcut Student Loan Interest Defined Student loan interest is interest you paid during the year on a qualified student loan. Hrblock taxcut It includes both required and voluntary interest payments. Hrblock taxcut Qualified Student Loan This is a loan you took out solely to pay qualified education expenses (defined later) that were: For you, your spouse, or a person who was your dependent (defined in chapter 3) when you took out the loan, Paid or incurred within a reasonable period of time before or after you took out the loan, and For education provided during an academic period when the student is an eligible student. Hrblock taxcut Loans from the following sources are not qualified student loans. Hrblock taxcut A related person. Hrblock taxcut A qualified employer plan. Hrblock taxcut Exceptions. Hrblock taxcut   For purposes of the student loan interest deduction, the following are exceptions to the general rules for dependents. Hrblock taxcut An individual can be your dependent even if you are the dependent of another taxpayer. Hrblock taxcut An individual can be your dependent even if the individual files a joint return with a spouse. Hrblock taxcut An individual can be your dependent even if the individual had gross income for the year that was equal to or more than the exemption amount for the year ($3,900 for 2013). Hrblock taxcut    Reasonable period of time. Hrblock taxcut   Qualified education expenses are treated as paid or incurred within a reasonable period of time before or after you take out the loan if they are paid with the proceeds of student loans that are part of a federal postsecondary education loan program. Hrblock taxcut   Even if not paid with the proceeds of that type of loan, the expenses are treated as paid or incurred within a reasonable period of time if both of the following requirements are met. Hrblock taxcut The expenses relate to a specific academic period. Hrblock taxcut The loan proceeds are disbursed within a period that begins 90 days before the start of that academic period and ends 90 days after the end of that academic period. Hrblock taxcut   If neither of the above situations applies, the reasonable period of time is determined based on all the relevant facts and circumstances. Hrblock taxcut Academic period. Hrblock taxcut   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. Hrblock taxcut 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. Hrblock taxcut Eligible student. Hrblock taxcut   This is a student who was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. Hrblock taxcut Enrolled at least half-time. Hrblock taxcut   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. Hrblock taxcut   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. Hrblock taxcut However, the standard may not be lower than any of those established by the U. Hrblock taxcut S. Hrblock taxcut Department of Education under the Higher Education Act of 1965. Hrblock taxcut Related person. Hrblock taxcut   You cannot deduct interest on a loan you get from a related person. Hrblock taxcut Related persons include: Your spouse, Your brothers and sisters, Your half brothers and half sisters, Your ancestors (parents, grandparents, etc. Hrblock taxcut ), Your lineal descendants (children, grandchildren, etc. Hrblock taxcut ), and Certain corporations, partnerships, trusts, and exempt organizations. Hrblock taxcut Qualified employer plan. Hrblock taxcut   You cannot deduct interest on a loan made under a qualified employer plan or under a contract purchased under such a plan. Hrblock taxcut Qualified Education Expenses For purposes of the student loan interest deduction, these expenses are the total costs of attending an eligible educational institution, including graduate school. Hrblock taxcut They include amounts paid for the following items. Hrblock taxcut Tuition and fees. Hrblock taxcut Room and board. Hrblock taxcut Books, supplies, and equipment. Hrblock taxcut Other necessary expenses (such as transportation). Hrblock taxcut The cost of room and board qualifies only to the extent that it is not more than: The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student, or If greater, the actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. Hrblock taxcut Eligible educational institution. Hrblock taxcut   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. Hrblock taxcut S. Hrblock taxcut Department of Education. Hrblock taxcut It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Hrblock taxcut   Certain educational institutions located outside the United States also participate in the U. Hrblock taxcut S. Hrblock taxcut Department of Education's Federal Student Aid (FSA) programs. Hrblock taxcut   For purposes of the student loan interest deduction, an eligible educational institution also includes an institution conducting an internship or residency program leading to a degree or certificate from an institution of higher education, a hospital, or a health care facility that offers postgraduate training. Hrblock taxcut   An educational institution must meet the above criteria only during the academic period(s) for which the student loan was incurred. Hrblock taxcut The deductibility of interest on the loan is not affected by the institution's subsequent loss of eligibility. Hrblock taxcut    The educational institution should be able to tell you if it is an eligible educational institution. Hrblock taxcut Adjustments to qualified education expenses. Hrblock taxcut   You must reduce your qualified education expenses by certain tax-free items (such as the tax-free part of scholarships and fellowships). Hrblock taxcut See chapter 4 of Publication 970 for details. Hrblock taxcut Include as Interest In addition to simple interest on the loan, certain loan origination fees, capitalized interest, interest on revolving lines of credit, and interest on refinanced student loans can be student loan interest if all other requirements are met. Hrblock taxcut Loan origination fee. Hrblock taxcut   In general, this is a one-time fee charged by the lender when a loan is made. Hrblock taxcut To be deductible as interest, the fee must be for the use of money rather than for property or services (such as commitment fees or processing costs) provided by the lender. Hrblock taxcut A loan origination fee treated as interest accrues over the life of the loan. Hrblock taxcut Capitalized interest. Hrblock taxcut    This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. Hrblock taxcut Interest on revolving lines of credit. Hrblock taxcut   This interest, which includes interest on credit card debt, is student loan interest if the borrower uses the line of credit (credit card) only to pay qualified education expenses. Hrblock taxcut See Qualified Education Expenses , earlier. Hrblock taxcut Interest on refinanced student loans. Hrblock taxcut   This includes interest on both: Consolidated loans—loans used to refinance more than one student loan of the same borrower, and Collapsed loans—two or more loans of the same borrower that are treated by both the lender and the borrower as one loan. Hrblock taxcut If you refinance a qualified student loan for more than your original loan and you use the additional amount for any purpose other than qualified education expenses, you cannot deduct any interest paid on the refinanced loan. Hrblock taxcut Voluntary interest payments. Hrblock taxcut   These are payments made on a qualified student loan during a period when interest payments are not required, such as when the borrower has been granted a deferment or the loan has not yet entered repayment status. Hrblock taxcut Do Not Include as Interest You cannot claim a student loan interest deduction for any of the following items. Hrblock taxcut Interest you paid on a loan if, under the terms of the loan, you are not legally obligated to make interest payments. Hrblock taxcut Loan origination fees that are payments for property or services provided by the lender, such as commitment fees or processing costs. Hrblock taxcut Interest you paid on a loan to the extent payments were made through your participation in the National Health Service Corps Loan Repayment Program (the “NHSC Loan Repayment Program”) or certain other loan repayment assistance programs. Hrblock taxcut For more information, see Student Loan Repayment Assistance in chapter 5 of Publication 970. Hrblock taxcut Can You Claim the Deduction Generally, you can claim the deduction if all of the following requirements are met. Hrblock taxcut Your filing status is any filing status except married filing separately. Hrblock taxcut No one else is claiming an exemption for you on his or her tax return. Hrblock taxcut You are legally obligated to pay interest on a qualified student loan. Hrblock taxcut You paid interest on a qualified student loan. Hrblock taxcut Interest paid by others. Hrblock taxcut   If you are the person legally obligated to make interest payments and someone else makes a payment of interest on your behalf, you are treated as receiving the payments from the other person and, in turn, paying the interest. Hrblock taxcut See chapter 4 of Publication 970 for more information. Hrblock taxcut No Double Benefit Allowed You cannot deduct as interest on a student loan any amount that is an allowable deduction under any other provision of the tax law (for example, home mortgage interest). Hrblock taxcut How Much Can You Deduct Your student loan interest deduction for 2013 is generally the smaller of: $2,500, or The interest you paid in 2013. Hrblock taxcut However, the amount determined above is phased out (gradually reduced) if your MAGI is between $60,000 and $75,000 ($125,000 and $155,000 if you file a joint return). Hrblock taxcut You cannot take a student loan interest deduction if your MAGI is $75,000 or more ($155,000 or more if you file a joint return). Hrblock taxcut For details on figuring your MAGI, see chapter 4 of Publication 970. Hrblock taxcut How Do You Figure the Deduction Generally, you figure the deduction using the Student Loan Interest Deduction Worksheet in the Form 1040 or Form 1040A instructions. Hrblock taxcut However, if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico, you must complete Worksheet 4-1 in chapter 4 of Publication 970. Hrblock taxcut To help you figure your student loan interest deduction, you should receive Form 1098-E, Student Loan Interest Statement. Hrblock taxcut Generally, an institution (such as a bank or governmental agency) that received interest payments of $600 or more during 2013 on one or more qualified student loans must send Form 1098-E (or acceptable substitute) to each borrower by January 31, 2014. Hrblock taxcut For qualified student loans taken out before September 1, 2004, the institution is required to include on Form 1098-E only payments of stated interest. Hrblock taxcut Other interest payments, such as certain loan origination fees and capitalized interest, may not appear on the form you receive. Hrblock taxcut However, if you pay qualifying interest that is not included on Form 1098-E, you can also deduct those amounts. Hrblock taxcut For information on allocating payments between interest and principal, see chapter 4 of Publication 970. Hrblock taxcut To claim the deduction, enter the allowable amount on Form 1040, line 33, or Form 1040A, line 18. Hrblock taxcut Tuition and Fees Deduction You may be able to deduct qualified education expenses paid during the year for yourself, your spouse, or your dependent(s). Hrblock taxcut You cannot claim this deduction if your filing status is married filing separately or if another person can claim an exemption for you as a dependent on his or her tax return. Hrblock taxcut The qualified expenses must be for higher education, as explained later under What Expenses Qualify . Hrblock taxcut The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. Hrblock taxcut Table 19-2 summarizes the features of the tuition and fees deduction. Hrblock taxcut You may be able to take a credit for your education expenses instead of a deduction. Hrblock taxcut You can choose the one that will give you the lower tax. Hrblock taxcut See chapter 35, Education Credits, for details about the credits. Hrblock taxcut Can You Claim the Deduction The following rules will help you determine if you can claim the tuition and fees deduction. Hrblock taxcut Who Can Claim the Deduction Generally, you can claim the tuition and fees deduction if all three of the following requirements are met. Hrblock taxcut You paid qualified education expenses of higher education in 2013 for academic periods beginning in 2013 and those beginning in the first three months of 2014. Hrblock taxcut You paid the education expenses for an eligible student. Hrblock taxcut The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption (defined in chapter 3) on your tax return. Hrblock taxcut Qualified education expenses are defined under What Expenses Qualify . Hrblock taxcut Eligible students are defined later under Who Is an Eligible Student . Hrblock taxcut Who Cannot Claim the Deduction You cannot claim the tuition and fees deduction if any of the following apply. Hrblock taxcut Your filing status is married filing separately. Hrblock taxcut Another person can claim an exemption for you as a dependent on his or her tax return. Hrblock taxcut You cannot take the deduction even if the other person does not actually claim that exemption. Hrblock taxcut Your modified adjusted gross income (MAGI) is more than $80,000 ($160,000 if filing a joint return). Hrblock taxcut 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. Hrblock taxcut More information on nonresident aliens can be found in Publication 519, U. Hrblock taxcut S. Hrblock taxcut Tax Guide for Aliens. Hrblock taxcut You or anyone else claims an American opportunity or lifetime learning credit in 2013 with respect to expenses of the student for whom the qualified education expenses were paid. Hrblock taxcut However, a state tax credit will not disqualify you from claiming a tuition and fees deduction. Hrblock taxcut Table 19-2. Hrblock taxcut Tuition and Fees Deduction at a Glance Do not rely on this table alone. Hrblock taxcut Refer to the text for more details. Hrblock taxcut Question   Answer What is the maximum benefit?   You can reduce your income subject to tax by up to $4,000. Hrblock taxcut Where is the deduction taken?   As an adjustment to income on Form 1040, line 34, or Form 1040A, line 19. Hrblock taxcut For whom must the expenses be paid?   A student enrolled in an eligible educational institution who is either: you, your spouse, or your dependent for whom you claim an exemption. Hrblock taxcut What tuition and fees are deductible?   Tuition and fees required for enrollment or attendance at an eligible postsecondary educational institution, but not including personal, living, or family expenses, such as room and board. Hrblock taxcut What Expenses Qualify The tuition and fees deduction is based on qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. Hrblock taxcut Generally, the deduction is allowed for qualified education expenses paid in 2013 in connection with enrollment at an institution of higher education during 2013 or for an academic period (defined earlier under Student Loan Interest Deduction ) beginning in 2013 or in the first 3 months of 2014. Hrblock taxcut Payments with borrowed funds. Hrblock taxcut   You can claim a tuition and fees deduction for qualified education expenses paid with the proceeds of a loan. Hrblock taxcut Use the expenses to figure the deduction for the year in which the expenses are paid, not the year in which the loan is repaid. Hrblock taxcut Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. Hrblock taxcut Student withdraws from class(es). Hrblock taxcut   You can claim a tuition and fees deduction for qualified education expenses not refunded when a student withdraws. Hrblock taxcut Qualified Education Expenses For purposes of the tuition and fees deduction, qualified education expenses are tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. Hrblock taxcut Eligible educational institution. Hrblock taxcut   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. Hrblock taxcut S. Hrblock taxcut Department of Education. Hrblock taxcut It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Hrblock taxcut The educational institution should be able to tell you if it is an eligible educational institution. Hrblock taxcut   Certain educational institutions located outside the United States also participate in the U. Hrblock taxcut S. Hrblock taxcut Department of Education's Federal Student Aid (FSA) programs. Hrblock taxcut Academic period. Hrblock taxcut    An academic period is any quarter, semester, trimester, or any other period of study as reasonably determined by an eligible educational institution. Hrblock taxcut If an eligible educational institution uses credit hours and does not have academic terms, each payment period may be treated as an academic period. Hrblock taxcut Related expenses. Hrblock taxcut   Student-activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses for the tuition and fees deduction only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance. Hrblock taxcut Prepaid expenses. Hrblock taxcut   Qualified education expenses paid in 2013 for an academic period that begins in the first three months of 2014 can be used in figuring the tuition and fees deduction. Hrblock taxcut See Academic period, earlier. Hrblock taxcut For example, if you pay $2,000 in December 2013 for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring the tuition and fees deduction for 2013 only if you meet all the other requirements. Hrblock taxcut    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 tuition and fees deduction. Hrblock taxcut No Double Benefit Allowed You cannot do any of the following. Hrblock taxcut Deduct qualified education expenses you deduct under any other provision of the law, for example, as a business expense. Hrblock taxcut Deduct qualified education expenses for a student on your income tax return if you or anyone else claims an American opportunity or lifetime learning credit for that same student in the same year. Hrblock taxcut Deduct qualified education expenses that have been used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or a qualified tuition program (QTP). Hrblock taxcut For a QTP, this applies only to the amount of tax-free earnings that were distributed, not to the recovery of contributions to the program. Hrblock taxcut See Figuring the Taxable Portion of a Distribution in chapter 7 (Coverdell ESA) and chapter 8 (QTP) of Publication 970. Hrblock taxcut Deduct qualified education expenses that have been paid with tax-free interest on U. Hrblock taxcut S. Hrblock taxcut savings bonds (Form 8815). Hrblock taxcut See Figuring the Tax-Free Amount in chapter 10 of Publication 970. Hrblock taxcut Deduct qualified education expenses that have been paid with tax-free educational assistance such as a scholarship, grant, or employer-provided educational assistance. Hrblock taxcut See Adjustments to qualified education expenses, later. Hrblock taxcut Adjustments to qualified education expenses. Hrblock taxcut   For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. Hrblock taxcut The result is the amount of adjusted qualified education expenses for each student. Hrblock taxcut Tax-free educational assistance. Hrblock taxcut   For tax-free educational assistance you received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance to that academic period. Hrblock taxcut See Academic period, earlier. Hrblock taxcut   This includes: The tax-free part of scholarships and fellowships, including Pell grants (see chapter 1 of Publication 970), The tax-free part of any employer-provided educational assistance (see chapter 11 of Publication 970), Veterans' educational assistance (see chapter 1 of Publication 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Hrblock taxcut Generally, any scholarship or fellowship you receive is treated as tax-free educational assistance. Hrblock taxcut However, a scholarship or fellowship is not treated as tax-free educational assistance to the extent you include it in gross income (if you are required to file a tax return) for the year the scholarship or fellowship is received and either: The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. Hrblock taxcut 970, chapter 1. Hrblock taxcut The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. Hrblock taxcut 970, chapter 1. Hrblock taxcut You may be able to increase the combined value of your tuition and fees deduction and certain educational assistance if you include some or all of the educational assistance in income in the year it is received. Hrblock taxcut For details, see Adjustments to Qualified Education Expenses in chapter 6 of Pub. Hrblock taxcut 970. Hrblock taxcut Some tax-free educational assistance received in 2013 may be treated as a refund of qualified education expenses paid in 2013. Hrblock taxcut 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). Hrblock taxcut 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. Hrblock taxcut 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. Hrblock taxcut Refunds. Hrblock taxcut   A refund of qualified education expenses may reduce adjusted qualified education expenses for the tax year or may require you to include some or all of the refund in your gross income for the year the refund is received. Hrblock taxcut See chapter 6 of Pub. Hrblock taxcut 970 for more information. Hrblock taxcut Some tax-free educational assistance received after 2013 may be treated as a refund. Hrblock taxcut See Tax-free educational assistance, earlier. Hrblock taxcut Refunds received in 2013. Hrblock taxcut    For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses paid in 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. Hrblock taxcut Refunds received after 2013 but before your income tax return is filed. Hrblock taxcut   If you receive a refund after 2013 of qualified education expenses you paid in 2013 and the refund is received before you file your 2013 income tax return, reduce the amount of qualified education expenses for 2013 by the amount of the refund. Hrblock taxcut Refunds received after 2013 and after your income tax return is filed. Hrblock taxcut   If you receive a refund after 2013 of qualified education expenses you paid in 2013 and the refund is received after you file your 2013 income tax return, you may need to include some or all of the refund in your gross income for the year the refund is received. Hrblock taxcut See chapter 6 of Pub. Hrblock taxcut 970 for more information. Hrblock taxcut Coordination with Coverdell education savings accounts and qualified tuition programs. Hrblock taxcut    Reduce your qualified education expenses by any qualified education expenses used to figure the exclusion from gross income of (a) interest received under an education savings bond program, or (b) any distribution from a Coverdell education savings account or qualified tuition program (QTP). Hrblock taxcut For a QTP, this applies only to the amount of tax-free earnings that were distributed, not to the recovery of contributions to the program. Hrblock taxcut Amounts that do not reduce qualified education expenses. Hrblock taxcut   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. Hrblock taxcut   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. Hrblock taxcut 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. Hrblock taxcut The use of the money is not restricted. Hrblock taxcut 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. Hrblock taxcut This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. Hrblock taxcut Sports, games, hobbies, and noncredit courses. Hrblock taxcut   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. Hrblock taxcut However, if the course of instruction or other education is part of the student's degree program, these expenses can qualify. Hrblock taxcut Comprehensive or bundled fees. Hrblock taxcut   Some eligible educational institutions combine all of their fees for an academic period into one amount. Hrblock taxcut If you do not receive, or do not have access to, an allocation showing how much you paid for qualified education expenses and how much you paid for personal expenses, such as those listed above, contact the institution. Hrblock taxcut 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. Hrblock taxcut See How Do You Figure the Deduction , later, for more information about Form 1098-T. Hrblock taxcut Who Is an Eligible Student For purposes of the tuition and fees deduction, an eligible student is a student who is enrolled in one or more courses at an eligible educational institution (defined earlier). Hrblock taxcut Who Can Claim a Dependent's Expenses Generally, in order to claim the tuition and fees deduction for qualified education expenses for a dependent, you must: Have paid the expenses, and Claim an exemption for the student as a dependent. Hrblock taxcut Table 19-3 summarizes who can claim the deduction. Hrblock taxcut How Much Can You Deduct The maximum tuition and fees deduction in 2013 is $4,000, $2,000, or $0, depending on the amount of your MAGI. Hrblock taxcut For details on figuring your MAGI, see chapter 6 of Publication 970. Hrblock taxcut How Do You Figure the Deduction Figure the deduction using Form 8917. Hrblock taxcut To help you figure your tuition and fees deduction, you should receive Form 1098-T, Tuition Statement. Hrblock taxcut 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. Hrblock taxcut To claim the deduction, enter the allowable amount on Form 1040, line 34, or Form 1040A, line 19, and attach your completed Form 8917. Hrblock taxcut Table 19-3. Hrblock taxcut Who Can Claim a Dependent's Expenses Do not rely on this table alone. Hrblock taxcut See Who Can Claim a Dependent's Expenses in chapter 6 of Publication 970. Hrblock taxcut IF your dependent is an eligible student and you. Hrblock taxcut . Hrblock taxcut . Hrblock taxcut AND. Hrblock taxcut . Hrblock taxcut . Hrblock taxcut THEN. Hrblock taxcut . Hrblock taxcut . Hrblock taxcut claim an exemption for your dependent you paid all qualified education expenses for your dependent only you can deduct the qualified education expenses that you paid. Hrblock taxcut Your dependent cannot take a deduction. Hrblock taxcut claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. Hrblock taxcut do not claim an exemption for your dependent you paid all qualified education expenses no one is allowed to take a deduction. Hrblock taxcut do not claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. Hrblock taxcut Educator Expenses If you were an eligible educator in 2013, you can deduct on Form 1040, line 23, or Form 1040A, line 16, up to $250 of qualified expenses you paid in 2013. Hrblock taxcut If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. Hrblock taxcut However, neither spouse can deduct more than $250 of his or her qualified expenses on Form 1040, line 23, or Form 1040A, line 16. Hrblock taxcut You may be able to deduct expenses that are more than the $250 (or $500) limit on Schedule A (Form 1040), line 21. Hrblock taxcut Eligible educator. Hrblock taxcut   An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide who worked in a school for at least 900 hours during a school year. Hrblock taxcut Qualified expenses. Hrblock taxcut   Qualified expenses include ordinary and necessary expenses paid in connection with books, supplies, equipment (including computer equipment, software, and services), and other materials used in the classroom. Hrblock taxcut An ordinary expense is one that is common and accepted in your educational field. Hrblock taxcut A necessary expense is one that is helpful and appropriate for your profession as an educator. Hrblock taxcut An expense does not have to be required to be considered necessary. Hrblock taxcut   Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. Hrblock taxcut   You must reduce your qualified expenses by the following amounts. Hrblock taxcut Excludable U. Hrblock taxcut S. Hrblock taxcut series EE and I savings bond interest from Form 8815. Hrblock taxcut See Figuring the Tax-Free Amount in chapter 10 of Publication 970. Hrblock taxcut Nontaxable qualified tuition program earnings or distributions. Hrblock taxcut See Figuring the Taxable Portion of a Distribution in chapter 8 of Publication 970. Hrblock taxcut Nontaxable distribution of earnings from a Coverdell education savings account. Hrblock taxcut See Figuring the Taxable Portion of a Distribution in chapter 7 of Publication 970. Hrblock taxcut Any reimbursements you received for these expenses that were not reported to you in box 1 of your Form W-2. Hrblock taxcut Prev  Up  Next   Home   More Online Publications
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Circular 230 Tax Professionals

Circular No. 230 (Rev. 8-2011)
Rules Governing Practice Before the Internal Revenue Service

The Office of Professional Responsibility (OPR) At-A-Glance
Understand the Office of Professional Responsibility's mission and operations as it pertains to the standards of practice for tax professionals.

Frequently Asked Questions (FAQ's)
The Office of Professional Responsibility: Frequently Asked Questions.

OPR's Disciplinary Stats
Information regarding OPR's calendar year(s) disciplinary stats

Office of Professional Responsibility Webinars
Learn more about Practice by viewing IRS/OPR webinars from the OPR's Director.

Latest News from Office of Professional Responsibility (OPR)
The latest news from OPR.

Rights and responsibilities of practitioners in Circular 230 disciplinary cases
Rules and procedures for practitioners who fail to comply with Circular 230.

Restrictions on Practitioners Disciplined by OPR
What tax practice activities are prohibited while under suspension/disbarment.

Circular 230 Disciplinary Proceedings
An Overview.

Announcements of Disciplinary Sanctions
Office of Professional Responsibility's Final Agency Decisions in disciplinary cases, and the Internal Revenue Bulletins List of Announcements for Disbarments, Suspensions, Resignations, and Censures Since 1998 taken Against Tax Professionals.

Information for Tax Professionals
Office of Professional Responsibility/Circular 230 - related issues.

Contingent Fees Under Circular 230
Contingent Fees Under Circular 230 - Notice 2008–43.

OPR 9/11/09 Discipline Policy on FBAR Violations by Practitioners
Statement from 9/11/09 re: Discipline Policy on FBAR Violations by Practitioners

Make a Complaint About a Tax Return Preparer
Taxpayers can use this site to find out how to file a complaint about a tax preparer.

Enrolled Agent Program
Special competencies are required to represent your client for audits and related tax matters before the IRS. Find out about the Special Enrollment Examination and how to become an enrolled agent.

Joint Board for the Enrollment of Actuaries
Information for Enrolled Actuaries, or for individuals who wish to become Enrolled Actuaries.

Enrolled Retirement Plan Agent Program
Information for enrolled retirement plan agents and individuals who wish to become enrolled retirement plan agents.

Page Last Reviewed or Updated: 26-Feb-2014

The Hrblock Taxcut

Hrblock taxcut Publication 3920 - Introductory Material Table of Contents Introduction Useful Items - You may want to see: Introduction This publication explains some of the provisions of the Victims of Terrorism Tax Relief Act of 2001. Hrblock taxcut Under this Act, the federal income tax liability of those killed in the following attacks is forgiven for certain tax years. Hrblock taxcut The April 19, 1995, attack on the Alfred P. Hrblock taxcut Murrah Federal Building (Oklahoma City attack). Hrblock taxcut The September 11, 2001, attacks on the World Trade Center, the Pentagon, and United Airlines Flight 93 in Somerset County, Pennsylvania (September 11 attacks). Hrblock taxcut Terrorist attacks involving anthrax occurring after September 10, 2001, and before January 1, 2002 (anthrax attacks). Hrblock taxcut The Act also provides other types of relief. Hrblock taxcut For example, it provides that the following amounts are not included in income. Hrblock taxcut Payments from the September 11th Victim Compensation Fund of 2001. Hrblock taxcut Qualified disaster relief payments made after September 10, 2001, to cover personal, family, living, or funeral expenses incurred because of a terrorist attack. Hrblock taxcut Certain disability payments received in tax years ending after September 10, 2001, for injuries sustained in a terrorist attack. Hrblock taxcut Death benefits paid by an employer to the survivor of an employee if the benefits are paid because the employee died as a result of a terrorist attack. Hrblock taxcut Debt cancellations made after September 10, 2001, and before January 1, 2002, because an individual died as a result of the September 11 attacks or anthrax attacks. Hrblock taxcut Worksheet A. Hrblock taxcut Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. Hrblock taxcut 1       2 Enter the total tax from the decedent's income tax return. Hrblock taxcut See Table 1 on page 5 for the line number for years before 2002. Hrblock taxcut 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. Hrblock taxcut (These taxes are not eligible for forgiveness. Hrblock taxcut )           a Self-employment tax. Hrblock taxcut 3a         b Social security and Medicare tax on tip income not reported to employer. Hrblock taxcut 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Hrblock taxcut 3c         d Tax on excess accumulation in qualified retirement plans. Hrblock taxcut 3d         e Household employment taxes. Hrblock taxcut 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Hrblock taxcut 3f         g Tax on golden parachute payments. Hrblock taxcut 3g       4 Add lines 3a through 3g. Hrblock taxcut 4       5 Tax to be forgiven. Hrblock taxcut Subtract line 4 from line 2. Hrblock taxcut 5       Note. Hrblock taxcut If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. Hrblock taxcut Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Hrblock taxcut If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. Hrblock taxcut The IRS will determine the amount to be refunded. Hrblock taxcut Worksheet A. Hrblock taxcut Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. Hrblock taxcut 1       2 Enter the total tax from the decedent's income tax return. Hrblock taxcut See Table 1 on page 5 for the line number for years before 2002. Hrblock taxcut 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. Hrblock taxcut (These taxes are not eligible for forgiveness. Hrblock taxcut )           a Self-employment tax. Hrblock taxcut 3a         b Social security and Medicare tax on tip income not reported to employer. Hrblock taxcut 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Hrblock taxcut 3c         d Tax on excess accumulation in qualified retirement plans. Hrblock taxcut 3d         e Household employment taxes. Hrblock taxcut 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Hrblock taxcut 3f         g Tax on golden parachute payments. Hrblock taxcut 3g       4 Add lines 3a through 3g. Hrblock taxcut 4       5 Tax to be forgiven. Hrblock taxcut Subtract line 4 from line 2. Hrblock taxcut 5       Note. Hrblock taxcut If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. Hrblock taxcut Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Hrblock taxcut If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. Hrblock taxcut The IRS will determine the amount to be refunded. Hrblock taxcut Useful Items - You may want to see: Publication 547 Casualties, Disasters, and Thefts 559 Survivors, Executors, and Administrators Form (and Instructions) 706 United States Estate (and Generation- Skipping Transfer) Tax Return 1040 U. Hrblock taxcut S. Hrblock taxcut Individual Income Tax Return 1040NR U. Hrblock taxcut S. Hrblock taxcut Nonresident Alien Income Tax Return 1040X Amended U. Hrblock taxcut S. Hrblock taxcut Individual Income Tax Return 1041 U. Hrblock taxcut S. Hrblock taxcut Income Tax Return for Estates and Trusts 1310 Statement of Person Claiming Refund Due a Deceased Taxpayer 4506 Request for Copy or Transcript of Tax Form Prev  Up  Next   Home   More Online Publications