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Irs Instructions

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Irs Instructions

Irs instructions 15. Irs instructions   Estimated Tax Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Special Estimated Tax Rules for Qualified FarmersQualified Farmer Special Rules for Qualified Farmers Estimated Tax Penalty for 2013 What's New Net Investment Income Tax. Irs instructions . Irs instructions  For tax years beginning in 2013, you may be subject to Net Investment Income Tax (NIIT). Irs instructions NIIT is a 3. Irs instructions 8% tax on the lesser of net investment income or the excess of your modified adjusted gross income (MAGI) over the threshold amount. Irs instructions NIIT may need to be included when calculating your estimated tax. Irs instructions For more information, see Publication 505,Tax Withholding and Estimated Tax. Irs instructions Additional Medicare Tax. Irs instructions  For tax years beginning in 2013, a 0. Irs instructions 9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income over a threshold amount based on your filing status. Irs instructions You may need to include this amount when figuring your estimated tax. Irs instructions For more information, see Publication 505. Irs instructions Introduction Estimated tax is the method used to pay tax on income that is not subject to withholding. Irs instructions See Publication 505 for the general rules and requirements for paying estimated tax. Irs instructions If you are a qualified farmer, defined below, you are subject to the special rules covered in this chapter for paying estimated tax. Irs instructions Topics - This chapter discusses: Special estimated tax rules for qualified farmers Estimated tax penalty Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) 1040 U. Irs instructions S. Irs instructions Individual Income Tax Return 1040-ES Estimated Tax for Individuals 2210-F Underpayment of Estimated Tax by Farmers and Fishermen See chapter 16 for information about getting publications and forms. Irs instructions Special Estimated Tax Rules for Qualified Farmers Special rules apply to the payment of estimated tax by individuals who are qualified farmers. Irs instructions If you are not a qualified farmer as defined next, see Publication 505 for the estimated tax rules that apply. Irs instructions Qualified Farmer An individual is a qualified farmer for 2013 if at least two-thirds of his or her gross income from all sources for 2012 or 2013 was from farming. Irs instructions See Gross Income , next, for information on how to figure your gross income from all sources and see Gross Income From Farming , later, for information on how to figure your gross income from farming. Irs instructions See also Percentage From Farming , later, for information on how to determine the percentage of your gross income from farming. Irs instructions Gross Income Gross income is all income you receive in the form of money, goods, property, and services that is not exempt from income tax. Irs instructions On a joint return, you must add your spouse's gross income to your gross income. Irs instructions To decide whether two-thirds of your gross income was from farming, use as your gross income the total of the following income (not loss) amounts from your tax return. Irs instructions Wages, salaries, tips, etc. Irs instructions Taxable interest. Irs instructions Ordinary dividends. Irs instructions Taxable refunds, credits, or offsets of state and local income taxes. Irs instructions Alimony. Irs instructions Gross business income from Schedule C (Form 1040). Irs instructions Gross business receipts from Schedule C-EZ (Form 1040). Irs instructions Capital gains from Schedule D (Form 1040). Irs instructions Losses are not netted against gains. Irs instructions Gains on sales of business property. Irs instructions Taxable IRA distributions, pensions, annuities, and social security benefits. Irs instructions Gross rental income from Schedule E (Form 1040). Irs instructions Gross royalty income from Schedule E (Form 1040). Irs instructions Taxable net income from an estate or trust reported on Schedule E (Form 1040). Irs instructions Income from a Real Estate Mortgage Investment Conduit reported on Schedule E (Form 1040). Irs instructions Gross farm rental income from Form 4835. Irs instructions Gross farm income from Schedule F (Form 1040). Irs instructions Your distributive share of gross income from a partnership, or limited liability company treated as a partnership, from Schedule K-1 (Form 1065). Irs instructions Your pro rata share of gross income from an S corporation, from Schedule K-1 (Form 1120S). Irs instructions Unemployment compensation. Irs instructions Other income not included with any of the items listed above. Irs instructions Gross Income From Farming Gross income from farming is income from cultivating the soil or raising agricultural commodities. Irs instructions It includes the following amounts. Irs instructions Income from operating a stock, dairy, poultry, bee, fruit, or truck farm. Irs instructions Income from a plantation, ranch, nursery, range, orchard, or oyster bed. Irs instructions Crop shares for the use of your land. Irs instructions Gains from sales of draft, breeding, dairy, or sporting livestock. Irs instructions Gross income from farming is the total of the following amounts from your tax return. Irs instructions Gross farm income from Schedule F (Form 1040). Irs instructions Gross farm rental income from Form 4835. Irs instructions Gross farm income from Schedule E (Form 1040), Parts II and III. Irs instructions Gains from the sale of livestock used for draft, breeding, sport, or dairy purposes reported on Form 4797. Irs instructions For more information about income from farming, see chapter 3. Irs instructions Farm income does not include any of the following: Wages you receive as a farm employee. Irs instructions Income you receive from contract grain harvesting and hauling with workers and machines you furnish. Irs instructions Gains you receive from the sale of farm land and depreciable farm equipment. Irs instructions Percentage From Farming Figure your gross income from all sources, discussed earlier. Irs instructions Then figure your gross income from farming, discussed earlier. Irs instructions Divide your farm gross income by your total gross income to determine the percentage of gross income from farming. Irs instructions Example 1. Irs instructions Jane Smith had the following total gross income and farm gross income amounts in 2013. Irs instructions Gross Income   Total Farm Taxable interest $3,000   Dividends 500   Rental income (Sch E) 41,500   Farm income (Sch F) 75,000 $75,000 Gain (Form 4797) 5,000 5,000 Total $125,000 $80,000 Schedule D showed gain from the sale of dairy cows carried over from Form 4797 ($5,000) in addition to a loss from the sale of corporate stock ($2,000). Irs instructions However, that loss is not netted against the gain to figure Ms. Irs instructions Smith's total gross income or her gross farm income. Irs instructions Her gross farm income is 64% of her total gross income ($80,000 ÷ $125,000 = 0. Irs instructions 64). Irs instructions Special Rules for Qualified Farmers The following special estimated tax rules apply if you are a qualified farmer for 2013. Irs instructions You do not have to pay estimated tax if you file your 2013 tax return and pay all the tax due by March 3, 2014. Irs instructions You do not have to pay estimated tax if your 2013 income tax withholding (including any amount applied to your 2013 estimated tax from your 2012 return) will be at least 662/3% (. Irs instructions 6667) of the total tax shown on your 2013 tax return or 100% of the total tax shown on your 2012 return. Irs instructions If you must pay estimated tax, you are required to make only one estimated tax payment (your required annual payment) by January 15, 2014, using special rules to figure the amount of the payment. Irs instructions See Required Annual Payment , next, for details. Irs instructions Figure 15-1 presents an overview of the special estimated tax rules that apply to qualified farmers. Irs instructions Example 2. Irs instructions Assume the same fact as in Example 1. Irs instructions Ms. Irs instructions Smith's gross farm income is only 64% of her total income. Irs instructions Therefore, based on her 2013 income, she does not qualify to use the special estimated tax rules for qualified farmers. Irs instructions However, she does qualify if at least two-thirds of her 2012 gross income was from farming. Irs instructions Example 3. Irs instructions Assume the same facts as in Example 1 except that Ms. Irs instructions Smith's farm income from Schedule F was $90,000 instead of $75,000. Irs instructions This made her total gross income $140,000 ($3,000 + $500 + $41,500 + $90,000 + $5,000) and her farm gross income $95,000 ($90,000 + $5,000). Irs instructions She qualifies to use the special estimated tax rules for qualified farmers, since 67. Irs instructions 9% (at least two-thirds) of her gross income is from farming ($95,000 ÷ $140,000 = . Irs instructions 679). Irs instructions Required Annual Payment If you are a qualified farmer and must pay estimated tax for 2013, use the worksheet on Form 1040-ES to figure the amount of your required annual payment. Irs instructions Apply the following special rules for qualified farmers to the worksheet. Irs instructions On line 14a, multiply line 13c by 662/3% (. Irs instructions 6667). Irs instructions On line 14b, enter 100% of the tax shown on your 2012 tax return regardless of the amount of your adjusted gross income. Irs instructions For this purpose, the “tax shown on your 2012 tax return” is the amount on line 61 of your 2012 return modified by certain adjustments. Irs instructions For more information, see chapter 4 of Publication 505. Irs instructions Estimated Tax Penalty for 2013 If you do not pay all your required estimated tax for 2013 by January 15, 2014, or file your 2013 return and pay any tax due by March 3, 2014, you may owe a penalty. Irs instructions Use Form 2210-F, Underpayment of Estimated Tax by Farmers and Fishermen, to determine if you owe a penalty. Irs instructions See the instructions for Form 2210-F. Irs instructions Figure 15-1. Irs instructions Estimated Tax for Farmers Please click here for the text description of the image. Irs instructions Figure 2–A If you receive a penalty notice, do not ignore it, even if you think it is in error. Irs instructions You may get a penalty notice even though you filed your return on time, attached Form 2210-F, and met the gross-income-from-farming requirement. Irs instructions If you receive a penalty notice for underpaying estimated tax and you think it is in error, write to the address on the notice and explain why you think the notice is in error. Irs instructions Include a computation similar to the one in Example 1 (earlier), showing that you met the gross income from farming requirement. Irs instructions Prev  Up  Next   Home   More Online Publications
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Publication 525, Taxable and Nontaxable Income

You can receive income in the form of money, property, or services. This publication discusses many kinds of income and explains whether they are taxable or nontaxable. It includes discussions on:

  • employee wages and fringe benefits,
  • income from bartering, partnerships, S corporations, and royalties
  • disability pensions,
  • life insurance proceeds, and
  • welfare and other public assistance benefits.

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Page Last Reviewed or Updated: 19-Nov-2013

The Irs Instructions

Irs instructions Publication 970 - Additional Material Table of Contents AppendicesAppendix A. Irs instructions Illustrated Example of Education Credits Glossary Appendices The following appendices are provided to help you claim the education benefits that will give you the lowest tax. Irs instructions Appendix A—An illustrated example of education credits, including a filled-in Form 8863 showing how to claim both the American opportunity credit and lifetime learning credit for 2013. Irs instructions Appendix B—A chart summarizing some of the major differences between the education tax benefits discussed in this publication. Irs instructions It is intended only as a guide. Irs instructions Look in this publication for more complete information. Irs instructions   Appendix A. Irs instructions Illustrated Example of Education Credits Dave and Valerie Jones are married and on their 2013 joint tax return they claim exemptions for their two dependent children, Sean (age 21, social security number: 000-00-0001) and Carey (age 18, social security number: 000–00–0002). Irs instructions Their modified adjusted gross income (MAGI) on Form 1040, line 38 is $110,000. Irs instructions Because Dave and Valerie have unusually high itemized deductions, their taxable income is $10,000 and their tax before credits is $1,000. Irs instructions Sean enrolled as a full-time graduate student in August 2013 at California State College. Irs instructions He graduated with his bachelor's degree in 2012 and did not attend school from January 2013 through July 2013. Irs instructions His parents claimed the Hope Scholarship Credit for Sean for 2008 and the American opportunity credit for Sean for 2010, 2011, and 2012. Irs instructions Carey enrolled full time as a freshman at the same college in January 2013 to begin working on her bachelor's degree. Irs instructions In 2013, Dave and Valerie paid $7,000 in tuition for Sean and $8,500 in tuition for Carey. Irs instructions California State College issued two Forms 1098-T, one for Sean and one for Carey, and sent them to the Joneses' residence. Irs instructions California State College reports amounts billed in 2013 instead of amounts paid during 2013. Irs instructions In completing Form 8863, the Joneses use the amounts they paid. Irs instructions Neither Sean nor Carey has been convicted of a felony for possession or distribution of a controlled substance before the end of 2013. Irs instructions Dave and Valerie figure their education credits by completing Form 8863. Irs instructions They begin Form 8863 on page 2 before completing Part I on page 1. Irs instructions Because the Joneses have two eligible students, they will complete page 2 twice, once for their son, Sean, and once for their daughter, Carey. Irs instructions The Joneses decide to complete Part III for Carey first, as shown later. Irs instructions They carry over the amount of $2,500 entered on Part III, line 30, to Part I, line 1. Irs instructions The Joneses complete a separate Part III for their son Sean. Irs instructions They check the “Yes” box on line 23, determine that Sean is not eligible for the American opportunity credit, and go to line 31 as instructed. Irs instructions They figure their line 31 adjusted qualified education expenses for Sean to be $7,000. Irs instructions Once they have completed Part III for each student, they figure their credits. Irs instructions The Joneses figure their refundable American opportunity credit of $1,000 by completing Form 8863, Part I, lines 1 through 8. Irs instructions They enter the amount from line 8, $1,000, on line 66 of their Form 1040. Irs instructions The Joneses enter $7,000 on Part II, line 10, of Form 8863 and figure their tentative lifetime learning credit for 2013 to be $1,400 (line 12). Irs instructions They cannot claim the full amount because their MAGI of $110,000 is greater than $107,000. Irs instructions They enter the reduced amount of $1,190 (figured on Part II, line 18) on the Credit Limit Worksheet, line 1. Irs instructions The $1,190 is added to their nonrefundable American opportunity credit ($1,500 on line 2 of the Credit Limit Worksheet) for a total nonrefundable credit of $2,690. Irs instructions The Joneses enter $1,000 on line 7 of the Credit Limit Worksheet, which is the smaller of their tax from line 46 of their Form 1040 (which is $1,000) or the $2,690 on line 3 of the Credit Limit Worksheet. Irs instructions They enter $1,000 on line 19, Part II of Form 8863 and on line 49 of Form 1040. Irs instructions This image is too large to be displayed in the current screen. Irs instructions Please click the link to view the image. Irs instructions Form 1098-T Adjusted Qualified Education Expenses Worksheet (Form 8863 instructions) 1. Irs instructions Total qualified education expenses paid for or on behalf of the student in 2013 for the academic period 8,500 2. Irs instructions Less adjustments:     a. Irs instructions Tax-free educational assistance received in 2013 allocable to the academic period   0     b. Irs instructions Tax-free educational assistance received in 2014 (and before you file your 2013 tax return) allocable to the academic period   0     c. Irs instructions Refunds of qualified education expenses paid in 2013 if the refund is received in 2013 or in 2014 before you file your 2013 tax return   0   3. Irs instructions Total adjustments (add lines 2a, 2b, and 2c) 0 4. Irs instructions Adjusted qualified education expenses. Irs instructions Subtract line 3 from line 1. Irs instructions If zero or less, enter -0- 8,500 This image is too large to be displayed in the current screen. Irs instructions Please click the link to view the image. Irs instructions Form 1098-T Adjusted Qualified Education Expenses Worksheet (Form 8863 instructions) 1. Irs instructions Total qualified education expenses paid for or on behalf of the student in 2013 for the academic period 7,000 2. Irs instructions Less adjustments:     a. Irs instructions Tax-free educational assistance received in 2013 allocable to the academic period   0     b. Irs instructions Tax-free educational assistance received in 2014 (and before you file your 2013 tax return) allocable to the academic period   0     c. Irs instructions Refunds of qualified education expenses paid in 2013 if the refund is received in 2013 or in 2014 before you file your 2013 tax return   0   3. Irs instructions Total adjustments (add lines 2a, 2b, and 2c) 0 4. Irs instructions Adjusted qualified education expenses. Irs instructions Subtract line 3 from line 1. Irs instructions If zero or less, enter -0- 7,000 Credit Limit Worksheet (Form 8863 instructions) Nonrefundable Credit Worksheet 1. Irs instructions Enter the amount from Form 8863, line 18 1. Irs instructions 1,190 2. Irs instructions Enter the amount from Form 8863, line 9 2. Irs instructions 1,500 3. Irs instructions Add lines 1 and 2 3. Irs instructions 2,690 4. Irs instructions Enter the amount from: Form 1040, line 46; or Form 1040A, line 28 4. Irs instructions 1,000 5. Irs instructions Enter the amount from either: Form 1040, lines 47 and 48, and the amount from Schedule R included on Form 1040, line 53; or Form 1040A, lines 29 and 30 5. Irs instructions 0 6. Irs instructions Subtract line 5 from line 4 6. Irs instructions 1,000 7. Irs instructions   Enter the smaller of line 3 or line 6 here and on Form 8863, line 19 7. Irs instructions 1,000 This image is too large to be displayed in the current screen. Irs instructions Please click the link to view the image. Irs instructions Form 8863 for Dave and Valerie Jones This image is too large to be displayed in the current screen. Irs instructions Please click the link to view the image. Irs instructions Carey Jones page 2 This image is too large to be displayed in the current screen. Irs instructions Please click the link to view the image. Irs instructions Filled-in Form 8863 Jones page 2 Appendix B. Irs instructions Highlights of Education Tax Benefits for Tax Year 2013 This chart highlights some differences among the benefits discussed in this publication. Irs instructions See the text for definitions and details. Irs instructions Do not rely on this chart alone. Irs instructions    Caution:You generally cannot claim more than one benefit for the same education expense. Irs instructions   Scholarships,  Fellowships, Grants, and  Tuition  Reductions American Opportunity Credit Lifetime Learning Credit Student Loan Interest Deduction Tuition and Fees Deduction Coverdell ESA† Qualified Tuition Program (QTP)† Education Exception to Additional Tax on Early IRA Distributions† Education Savings Bond Program† Employer- Provided Educational Assistance† Business Deduction for Work-Related Education What is your  benefit? Amounts received may not be taxable   Credits can reduce the amount of tax you have to pay. Irs instructions    40% of the credit may be refundable (limited to $1,000 per student). Irs instructions Credits can reduce amount of tax you must pay Can deduct interest paid Can deduct expenses Earnings not  taxed Earnings not taxed No 10%  additional tax on early distribution Interest not taxed Employer benefits not taxed Can deduct expenses What is the annual limit? None $2,500 credit per student $2,000 credit per tax return     $2,500 deduction $4,000 deduction $2,000 contribution per beneficiary None Amount of qualified  education expenses Amount of qualified  education expenses $5,250 exclusion Amount of qualifying work-related education expenses What expenses  qualify besides  tuition and required enrollment fees? Course-related expenses such as fees, books, supplies, and equipment Course-related books, supplies, and equipment Amounts paid for required books, etc. Irs instructions , that must be paid to the educational institution, etc. Irs instructions , are required fees Books Supplies Equipment  Room & board  Transportation  Other necessary expenses  None Books Supplies Equipment  Expenses for special needs services  Payments to QTP  Higher education: Room & board if  at least half-time  student  Elem/sec (K–12) education: Tutoring Room & board Uniforms Transportation Computer  access Supplementary expenses Books Supplies Equipment  Room & board if  at least half-time student  Expenses for special needs services Books Supplies Equipment  Room & board if  at least half-time student  Expenses for special needs services Payments to Coverdell ESA  Payments to QTP Books Supplies Equipment Transportation  Travel  Other necessary expenses   Scholarships,  Fellowships, Grants, and  Tuition  Reductions American Opportunity Credit Lifetime Learning Credit Student Loan Interest Deduction Tuition and Fees Deduction Coverdell ESA† Qualified Tuition Program (QTP)† Education Exception to Additional Tax on Early IRA Distributions† Education Savings Bond Program† Employer- Provided Educational Assistance† Business Deduction for Work-Related Education What education qualifies? Undergraduate & graduate  K–12 Undergraduate & graduate Undergraduate & graduate  Courses to acquire or improve job skills    Undergraduate & graduate Undergraduate & graduate Undergraduate & graduate  K–12 Undergraduate & graduate Undergraduate & graduate Undergraduate & graduate Undergraduate & graduate Required by employer or law to keep present job, salary, status  Maintain or improve job skills What are some of the other  conditions that  apply? Must be in degree or vocational program  Payment of tuition and required fees must be allowed under the grant Can be claimed for only 4 tax years (which includes years Hope Scholarship Credit claimed)  Must be enrolled at least half-time in degree program  No felony drug conviction(s)  Must not have completed first 4 years of postsecondary education before end of preceding tax year. Irs instructions   No other conditions Must have been at least half-time  student in degree program Cannot claim both deduction & education credit for same student in same year Assets must be distributed at age 30 unless special  needs beneficiary No other conditions No other conditions Applies only to qualified series  EE bonds issued after 1989 or series I bonds No other conditions Cannot be to  meet minimum educational requirements of present trade/business  Cannot qualify  you for new trade/business   In what income  range do benefits  phase out? No phaseout $80,000 – $90,000  $160,000 – $180,000 for joint returns $53,000 – $63,000  $107,000 – $127,000 for joint returns $60,000 – $75,000  $125,000 –  $155,000 for  joint returns  $60,000 – $80,000  $130,000 –  $160,000 for  joint returns  $95,000 – $110,000  $190,000 – $220,000 for  joint returns No phaseout No phaseout   No phaseout No phaseout † Any nontaxable distribution is limited to the amount that does not exceed qualified education expenses. Irs instructions Glossary The education benefits included in this publication were enacted over many years, leading to a number of common terms being defined differently from one benefit to the next. Irs instructions For example, an eligible educational institution means one thing when determining if earnings from a Coverdell education savings account are not taxable and something else when determining if a scholarship or fellowship is not taxable. Irs instructions For each term listed below that has more than one definition, the definition for each education benefit is listed. Irs instructions Academic period:   A semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. Irs instructions If an educational institution uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. Irs instructions Adjusted qualified education expenses (AQEE):    Qualified education expenses (defined later) reduced by any tax-free educational assistance, such as a tax-free scholarship or employer-provided educational assistance. Irs instructions They must also be reduced by any qualified education expenses deducted elsewhere on your return, used to determine an education credit or other benefit, or used to determine a tax-free distribution. Irs instructions For information on a specific benefit, see the appropriate chapter in this publication. Irs instructions Candidate for a degree:   A student who meets either of the following requirements. Irs instructions Attends a primary or secondary school or pursues a degree at a college or university, or Attends an accredited educational institution that is authorized to provide: A program that is acceptable for full credit toward a bachelor's or higher degree, or A program of training to prepare students for gainful employment in a recognized occupation. Irs instructions Designated beneficiary:   The individual named in the document creating the account/plan who is to receive the benefit of the funds in the account/plan. Irs instructions Eligible educational institution:    American opportunity credit. Irs instructions Any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the Department of Education. Irs instructions It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Irs instructions Coverdell education savings account (ESA). Irs instructions Any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the Department of Education. Irs instructions It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Irs instructions Also included is any public, private, or religious school that provides elementary or secondary education (kindergarten through grade 12), as determined under state law. Irs instructions Education savings bond program. Irs instructions Same as American opportunity credit in this category. Irs instructions IRA, early distributions from. Irs instructions Same as American opportunity credit in this category. Irs instructions Lifetime learning credit. Irs instructions Same as American opportunity credit in this category. Irs instructions Qualified tuition program (QTP). Irs instructions Same as American opportunity credit in this category. Irs instructions Scholarships and fellowships. Irs instructions An institution that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities. Irs instructions Student loan, cancellation of. Irs instructions Same as Scholarships and fellowships in this category. Irs instructions Student loan interest deduction. Irs instructions Any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the Department of Education. Irs instructions It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Irs instructions Also included is an institution that conducts 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. Irs instructions Tuition and fees deduction. Irs instructions Same as American opportunity credit in this category. Irs instructions Eligible student:    American opportunity credit. Irs instructions A student who meets all of the following requirements for the tax year for which the credit is being determined. Irs instructions Did not have expenses that were used to figure an American opportunity or Hope Scholarship Credit in any 4 earlier tax years. Irs instructions Had not completed the first 4 years of postsecondary education (generally the freshman through senior years). Irs instructions For at least one academic period beginning in the tax year, was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential at an eligible educational institution. Irs instructions Was free of any federal or state felony conviction for possessing or distributing a controlled substance as of the end of the tax year. Irs instructions Lifetime learning credit. Irs instructions A student who is enrolled in one or more courses at an eligible educational institution. Irs instructions Student loan interest deduction. Irs instructions A student who was enrolled at least half-time in a program leading to a postsecondary degree, certificate, or other recognized educational credential at an eligible educational institution. Irs instructions Tuition and fees deduction. Irs instructions A student who is enrolled in one or more courses at an eligible educational institution. Irs instructions Half-time student:   A student who is enrolled for at least half the full-time academic work load for the course of study the student is pursuing, as determined under the standards of the school where the student is enrolled. Irs instructions Modified adjusted gross income (MAGI):    American opportunity credit. Irs instructions Adjusted gross income (AGI) as figured on the federal income tax return, 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. Irs instructions Coverdell education savings account (ESA). Irs instructions Same as American opportunity credit in this category. Irs instructions Education savings bond program. Irs instructions Adjusted gross income (AGI) as figured on the federal income tax return 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. Irs instructions Lifetime learning credit. Irs instructions Same as American opportunity credit in this category. Irs instructions Student loan interest deduction. Irs instructions Adjusted gross income (AGI) as figured on the federal income tax return without taking into account any student loan interest deduction, tuition and fees deduction, or domestic production activities deduction, and modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. Irs instructions Tuition and fees deduction. Irs instructions Adjusted gross income (AGI) as figured on the federal income tax return without taking into account any tuition and fees deduction, or domestic production activities deduction, and modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. Irs instructions Phaseout:   The amount of credit or deduction allowed is reduced when modified adjusted gross income (MAGI) is greater than a specified amount of income. Irs instructions Qualified education expenses:   See pertinent chapter for specific items. Irs instructions    American opportunity credit. Irs instructions Tuition and certain related expenses (including student activity fees) required for enrollment or attendance at an eligible educational institution. Irs instructions Books, supplies, and equipment needed for a course of study are included even if not purchased from the educational institution. Irs instructions Does not include expenses for room and board. Irs instructions Does not include expenses for courses involving sports, games, or hobbies (including noncredit courses) that are not part of the student's postsecondary degree program. Irs instructions Coverdell education savings account (ESA). Irs instructions Expenses related to or required for enrollment or attendance of the designated beneficiary at an eligible elementary, secondary, or postsecondary school. Irs instructions Many specialized expenses included for K–12. Irs instructions Also includes expenses for special needs services and contribution to qualified tuition program (QTP). Irs instructions Education savings bond program. Irs instructions Tuition and fees required to enroll at or attend an eligible educational institution. Irs instructions Also includes contributions to a qualified tuition program (QTP) or Coverdell education savings account (ESA). Irs instructions Does not include expenses for room and board. Irs instructions Does not include expenses for courses involving sports, games, or hobbies that are not part of a degree or certificate granting program. Irs instructions IRA, early distributions from. Irs instructions Tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution, plus certain limited costs of room and board for students who are enrolled at least half-time. Irs instructions Also includes expenses for special needs services incurred by or for special needs students in connection with their enrollment or attendance. Irs instructions Lifetime learning credit. Irs instructions Tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. Irs instructions Student-activity fees and expenses for course-related books, supplies, and equipment are included only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance. Irs instructions Does not include expenses for room and board. Irs instructions Does not include expenses for courses involving sports, games, or hobbies (including noncredit courses) that are not part of the student's postsecondary degree program, unless taken by the student to acquire or improve job skills. Irs instructions Qualified tuition program (QTP). Irs instructions Tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution, plus certain limited costs of room and board for students who are enrolled at least half-time. Irs instructions Includes expenses for special needs services and computer access. Irs instructions Scholarships and fellowships. Irs instructions Expenses for tuition and fees required to enroll at or attend an eligible educational institution, and course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. Irs instructions Course-related items must be required of all students in the course of instruction. Irs instructions Student loan interest deduction. Irs instructions Total costs of attending an eligible educational institution, including graduate school (however, limitations may apply to the cost of room and board allowed). Irs instructions Tuition and fees deduction. Irs instructions Tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. Irs instructions Student-activity fees and expenses for course-related books, supplies, and equipment are included only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance. Irs instructions Recapture:   To include as income on your current year's return an amount allowed as a deduction in a prior year. Irs instructions To include as tax on your current year's return an amount allowed as a credit in a prior year. Irs instructions Rollover:   A tax-free distribution to you of cash or other assets from a tax-favored plan that you contribute to another tax-favored plan. Irs instructions Transfer:   A movement of funds in a tax-favored plan from one trustee directly to another, either at your request or at the trustee's request. Irs instructions Prev  Up  Next   Home   More Online Publications