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Turbo Tax 1040ez

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Turbo Tax 1040ez

Turbo tax 1040ez Publication 907 - Introductory Material Table of Contents Future Developments IntroductionOrdering forms and publications. Turbo tax 1040ez Tax questions. Turbo tax 1040ez Future Developments For the latest information about developments related to Publication 907, such as legislation enacted after this publication was published, go to www. Turbo tax 1040ez IRS. Turbo tax 1040ez gov/pub907. Turbo tax 1040ez    Introduction This publication gives you a brief introduction to certain parts of the tax law of particular interest to people with disabilities and those who care for people with disabilities. Turbo tax 1040ez It includes highlights about: Income, Itemized deductions, Tax credits, Household employers, and Business tax incentives. Turbo tax 1040ez You will find most of the information you need to complete your tax return in your form instruction booklet. Turbo tax 1040ez If you need additional information, you may want to order a free tax publication. Turbo tax 1040ez You may also want to take advantage of the other free tax help services that the IRS provides. Turbo tax 1040ez See How To Get Tax Help , at the end of this publication, for information about getting publications, forms, and free tax services. Turbo tax 1040ez Comments and suggestions. Turbo tax 1040ez   We welcome your comments about this publication and your suggestions for future editions. Turbo tax 1040ez   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Turbo tax 1040ez NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Turbo tax 1040ez Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Turbo tax 1040ez   You can send your comments from www. Turbo tax 1040ez irs. Turbo tax 1040ez gov/formspubs/. Turbo tax 1040ez Click on “More Information” and then on “Comment on Tax Forms and Publications”. Turbo tax 1040ez   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Turbo tax 1040ez Ordering forms and publications. Turbo tax 1040ez   Visit www. Turbo tax 1040ez irs. Turbo tax 1040ez gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Turbo tax 1040ez Internal Revenue Service 1201 N. Turbo tax 1040ez Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Turbo tax 1040ez   If you have a tax question, check the information available on IRS. Turbo tax 1040ez gov or call 1-800-829-1040. Turbo tax 1040ez We cannot answer tax questions sent to either of the above addresses. Turbo tax 1040ez Prev  Up  Next   Home   More Online Publications
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1099-K Reporting Requirements for Payment Settlement Entities

Beginning in January, 2012, payment settlement entities (PSEs) are required by the Housing Assistance Tax Act of 2008 to report on Form 1099-K the following transactions:

  • All payments made in settlement of payment card transactions (e.g., credit card);
  • Payments in settlement of third party network transactions IF:
    -Gross payments to a participating payee exceed $20,000; AND
    -There are more than 200 transactions with the participating payee.

Filing Deadlines & Procedures

Your 1099-Ks are due to merchants by January 31, 2014. Electronically filed 1099-Ks are due to the IRS April 1, 2014 (normally March 31), while paper 1099-Ks are due February 28, 2014.

File your 1099-K electronically through the FIRE (Filing Information Returns Electronically) option. For information, review Publication 1220 (PDF). If you are considering filing on paper, review General Instructions for Certain Information Returns.

Verification Processes

We verify that tax returns are correct and complete using the following processes:

More Information

You can find more about the 1099-K and other information returns at our Third Party Reporting Information Center.

You may also want to see Frequently Asked Question about Backup Withholding

Sign up for the e-news subscriptions you choose and we'll deliver info on a variety of tax topics right to your inbox. 
 

 

Page Last Reviewed or Updated: 20-Mar-2014

The Turbo Tax 1040ez

Turbo tax 1040ez 12. Turbo tax 1040ez   Business Deduction for Work-Related Education Table of Contents What's New Introduction Qualifying Work-Related EducationEducation Required by Employer or by Law Education To Maintain or Improve Skills Education To Meet Minimum Requirements Education That Qualifies You for a New Trade or Business What Expenses Can Be DeductedUnclaimed reimbursement. Turbo tax 1040ez Transportation Expenses Travel Expenses No Double Benefit Allowed How To Treat ReimbursementsAccountable Plans Nonaccountable Plans Deducting Business ExpensesSelf-Employed Persons Employees Performing Artists and Fee-Basis Officials Impairment-Related Work Expenses Recordkeeping Illustrated Example What's New Standard mileage rate. Turbo tax 1040ez  Generally, if you claim a business deduction for work-related education and you drive your car to and from school, the amount you can deduct for miles driven from January 1, 2013 through December 31, 2013, is 56. Turbo tax 1040ez 5 cents per mile. Turbo tax 1040ez For more information, see Transportation Expenses under What Expenses Can Be Deducted, later. Turbo tax 1040ez Introduction This chapter discusses work-related education expenses that you may be able to deduct as business expenses. Turbo tax 1040ez To claim such a deduction, you must: Itemize your deductions on Schedule A (Form 1040 or 1040NR) if you are an employee, File 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 if you are self-employed, and Have expenses for education that meet the requirements discussed under Qualifying Work-Related Education , later. Turbo tax 1040ez What is the tax benefit of taking a business deduction for work-related education. Turbo tax 1040ez   If you are an employee and can itemize your deductions, you may be able to claim a deduction for the expenses you pay for your work-related education. Turbo tax 1040ez Your deduction will be the amount by which your qualifying work-related education expenses plus other job and certain miscellaneous expenses (except for impairment-related work expenses of disabled individuals) is greater than 2% of your adjusted gross income. Turbo tax 1040ez An itemized deduction reduces the amount of your income subject to tax. Turbo tax 1040ez   If you are self-employed, you deduct your expenses for qualifying work-related education directly from your self-employment income. Turbo tax 1040ez This reduces the amount of your income subject to both income tax and self-employment tax. Turbo tax 1040ez   Your work-related education expenses may also qualify you for other tax benefits, such as the American opportunity and lifetime learning credits. Turbo tax 1040ez You may qualify for these other benefits even if you do not meet the requirements listed above. Turbo tax 1040ez   Also, your work-related education expenses may qualify you to claim more than one tax benefit. Turbo tax 1040ez Generally, you may claim any number of benefits as long as you use different expenses to figure each one. Turbo tax 1040ez Qualifying Work-Related Education You can deduct the costs of qualifying work-related education as business expenses. Turbo tax 1040ez This is education that meets at least one of the following two tests. Turbo tax 1040ez The education is required by your employer or the law to keep your present salary, status, or job. Turbo tax 1040ez The required education must serve a bona fide business purpose of your employer. Turbo tax 1040ez The education maintains or improves skills needed in your present work. Turbo tax 1040ez However, even if the education meets one or both of the above tests, it is not qualifying work-related education if it: Is needed to meet the minimum educational requirements of your present trade or business, or Is part of a program of study that will qualify you for a new trade or business. Turbo tax 1040ez You can deduct the costs of qualifying work-related education as a business expense even if the education could lead to a degree. Turbo tax 1040ez Use Figure 12-1, Does Your Work-Related Education Qualify as a quick check to see if your education qualifies. Turbo tax 1040ez Education Required by Employer or by Law Once you have met the minimum educational requirements for your job, your employer or the law may require you to get more education. Turbo tax 1040ez This additional education is qualifying work-related education if all three of the following requirements are met. Turbo tax 1040ez It is required for you to keep your present salary, status, or job, The requirement serves a bona fide business purpose of your employer, and The education is not part of a program that will qualify you for a new trade or business. Turbo tax 1040ez When you get more education than your employer or the law requires, the additional education can be qualifying work-related education only if it maintains or improves skills required in your present work. Turbo tax 1040ez See Education To Maintain or Improve Skills , later. Turbo tax 1040ez Example. Turbo tax 1040ez You are a teacher who has satisfied the minimum requirements for teaching. Turbo tax 1040ez Your employer requires you to take an additional college course each year to keep your teaching job. Turbo tax 1040ez If the courses will not qualify you for a new trade or business, they are qualifying work-related education even if you eventually receive a master's degree and an increase in salary because of this extra education. Turbo tax 1040ez This image is too large to be displayed in the current screen. Turbo tax 1040ez Please click the link to view the image. Turbo tax 1040ez Figure 12-1 Education To Maintain or Improve Skills If your education is not required by your employer or the law, it can be qualifying work-related education only if it maintains or improves skills needed in your present work. Turbo tax 1040ez This could include refresher courses, courses on current developments, and academic or vocational courses. Turbo tax 1040ez Example. Turbo tax 1040ez You repair televisions, radios, and stereo systems for XYZ Store. Turbo tax 1040ez To keep up with the latest changes, you take special courses in radio and stereo service. Turbo tax 1040ez These courses maintain and improve skills required in your work. Turbo tax 1040ez Maintaining skills vs. Turbo tax 1040ez qualifying for new job. Turbo tax 1040ez   Education to maintain or improve skills needed in your present work is not qualifying education if it will also qualify you for a new trade or business. Turbo tax 1040ez Education during temporary absence. Turbo tax 1040ez   If you stop working for a year or less in order to get education to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. Turbo tax 1040ez Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. Turbo tax 1040ez Example. Turbo tax 1040ez You quit your biology research job to become a full-time biology graduate student for 1 year. Turbo tax 1040ez If you return to work in biology research after completing the courses, the education is related to your present work even if you do not go back to work with the same employer. Turbo tax 1040ez Education during indefinite absence. Turbo tax 1040ez   If you stop work for more than a year, your absence from your job is considered indefinite. Turbo tax 1040ez Education during an indefinite absence, even if it maintains or improves skills needed in the work from which you are absent, is considered to qualify you for a new trade or business. Turbo tax 1040ez Therefore, it is not qualifying work-related education. Turbo tax 1040ez Education To Meet Minimum Requirements Education you need to meet the minimum educational requirements for your present trade or business is not qualifying work-related education. Turbo tax 1040ez The minimum educational requirements are determined by: Laws and regulations, Standards of your profession, trade, or business, and Your employer. Turbo tax 1040ez Once you have met the minimum educational requirements that were in effect when you were hired, you do not have to meet any new minimum educational requirements. Turbo tax 1040ez This means that if the minimum requirements change after you were hired, any education you need to meet the new requirements can be qualifying education. Turbo tax 1040ez You have not necessarily met the minimum educational requirements of your trade or business simply because you are already doing the work. Turbo tax 1040ez Example 1. Turbo tax 1040ez You are a full-time engineering student. Turbo tax 1040ez Although you have not received your degree or certification, you work part time as an engineer for a firm that will employ you as a full-time engineer after you finish college. Turbo tax 1040ez Although your college engineering courses improve your skills in your present job, they are also needed to meet the minimum job requirements for a full-time engineer. Turbo tax 1040ez The education is not qualifying work-related education. Turbo tax 1040ez Example 2. Turbo tax 1040ez You are an accountant and you have met the minimum educational requirements of your employer. Turbo tax 1040ez Your employer later changes the minimum educational requirements and requires you to take college courses to keep your job. Turbo tax 1040ez These additional courses can be qualifying work-related education because you have already satisfied the minimum requirements that were in effect when you were hired. Turbo tax 1040ez Requirements for Teachers States or school districts usually set the minimum educational requirements for teachers. Turbo tax 1040ez The requirement is the college degree or the minimum number of college hours usually required of a person hired for that position. Turbo tax 1040ez If there are no requirements, you will have met the minimum educational requirements when you become a faculty member. Turbo tax 1040ez The determination of whether you are a faculty member of an educational institution must be made on the basis of the particular practices of the institution. Turbo tax 1040ez You generally will be considered a faculty member when one or more of the following occurs. Turbo tax 1040ez You have tenure. Turbo tax 1040ez Your years of service count toward obtaining tenure. Turbo tax 1040ez You have a vote in faculty decisions. Turbo tax 1040ez Your school makes contributions for you to a retirement plan other than social security or a similar program. Turbo tax 1040ez Example 1. Turbo tax 1040ez The law in your state requires beginning secondary school teachers to have a bachelor's degree, including 10 professional education courses. Turbo tax 1040ez In addition, to keep the job a teacher must complete a fifth year of training within 10 years from the date of hire. Turbo tax 1040ez If the employing school certifies to the state Department of Education that qualified teachers cannot be found, the school can hire persons with only 3 years of college. Turbo tax 1040ez However, to keep their jobs, these teachers must get a bachelor's degree and the required professional education courses within 3 years. Turbo tax 1040ez Under these facts, the bachelor's degree, whether or not it includes the 10 professional education courses, is considered the minimum educational requirement for qualification as a teacher in your state. Turbo tax 1040ez If you have all the required education except the fifth year, you have met the minimum educational requirements. Turbo tax 1040ez The fifth year of training is qualifying work-related education unless it is part of a program of study that will qualify you for a new trade or business. Turbo tax 1040ez Example 2. Turbo tax 1040ez Assume the same facts as in Example 1 except that you have a bachelor's degree and only six professional education courses. Turbo tax 1040ez The additional four education courses can be qualifying work-related education. Turbo tax 1040ez Although you do not have all the required courses, you have already met the minimum educational requirements. Turbo tax 1040ez Example 3. Turbo tax 1040ez Assume the same facts as in Example 1 except that you are hired with only 3 years of college. Turbo tax 1040ez The courses you take that lead to a bachelor's degree (including those in education) are not qualifying work-related education. Turbo tax 1040ez They are needed to meet the minimum educational requirements for employment as a teacher. Turbo tax 1040ez Example 4. Turbo tax 1040ez You have a bachelor's degree and you work as a temporary instructor at a university. Turbo tax 1040ez At the same time, you take graduate courses toward an advanced degree. Turbo tax 1040ez The rules of the university state that you can become a faculty member only if you get a graduate degree. Turbo tax 1040ez Also, you can keep your job as an instructor only as long as you show satisfactory progress toward getting this degree. Turbo tax 1040ez You have not met the minimum educational requirements to qualify you as a faculty member. Turbo tax 1040ez The graduate courses are not qualifying work-related education. Turbo tax 1040ez Certification in a new state. Turbo tax 1040ez   Once you have met the minimum educational requirements for teachers for your state, you are considered to have met the minimum educational requirements in all states. Turbo tax 1040ez This is true even if you must get additional education to be certified in another state. Turbo tax 1040ez Any additional education you need is qualifying work-related education. Turbo tax 1040ez You have already met the minimum requirements for teaching. Turbo tax 1040ez Teaching in another state is not a new trade or business. Turbo tax 1040ez Example. Turbo tax 1040ez You hold a permanent teaching certificate in State A and are employed as a teacher in that state for several years. Turbo tax 1040ez You move to State B and are promptly hired as a teacher. Turbo tax 1040ez You are required, however, to complete certain prescribed courses to get a permanent teaching certificate in State B. Turbo tax 1040ez These additional courses are qualifying work-related education because the teaching position in State B involves the same general kind of work for which you were qualified in State A. Turbo tax 1040ez Education That Qualifies You for a New Trade or Business Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education. Turbo tax 1040ez This is true even if you do not plan to enter that trade or business. Turbo tax 1040ez If you are an employee, a change of duties that involves the same general kind of work is not a new trade or business. Turbo tax 1040ez Example 1. Turbo tax 1040ez You are an accountant. Turbo tax 1040ez Your employer requires you to get a law degree at your own expense. Turbo tax 1040ez You register at a law school for the regular curriculum that leads to a law degree. Turbo tax 1040ez Even if you do not intend to become a lawyer, the education is not qualifying because the law degree will qualify you for a new trade or business. Turbo tax 1040ez Example 2. Turbo tax 1040ez You are a general practitioner of medicine. Turbo tax 1040ez You take a 2-week course to review developments in several specialized fields of medicine. Turbo tax 1040ez The course does not qualify you for a new profession. Turbo tax 1040ez It is qualifying work- related education because it maintains or improves skills required in your present profession. Turbo tax 1040ez Example 3. Turbo tax 1040ez While working in the private practice of psychiatry, you enter a program to study and train at an accredited psychoanalytic institute. Turbo tax 1040ez The program will lead to qualifying you to practice psychoanalysis. Turbo tax 1040ez The psychoanalytic training does not qualify you for a new profession. Turbo tax 1040ez It is qualifying work-related education because it maintains or improves skills required in your present profession. Turbo tax 1040ez Bar or CPA Review Course Review courses to prepare for the bar examination or the certified public accountant (CPA) examination are not qualifying work-related education. Turbo tax 1040ez They are part of a program of study that can qualify you for a new profession. Turbo tax 1040ez Teaching and Related Duties All teaching and related duties are considered the same general kind of work. Turbo tax 1040ez A change in duties in any of the following ways is not considered a change to a new business. Turbo tax 1040ez Elementary school teacher to secondary school teacher. Turbo tax 1040ez Teacher of one subject, such as biology, to teacher of another subject, such as art. Turbo tax 1040ez Classroom teacher to guidance counselor. Turbo tax 1040ez Classroom teacher to school administrator. Turbo tax 1040ez What Expenses Can Be Deducted If your education meets the requirements described earlier under Qualifying Work-Related Education you can generally deduct your education expenses as business expenses. Turbo tax 1040ez If you are not self-employed, you can deduct business expenses only if you itemize your deductions. Turbo tax 1040ez You cannot deduct expenses related to tax-exempt and excluded income. Turbo tax 1040ez Deductible expenses. Turbo tax 1040ez   The following education expenses can be deducted. Turbo tax 1040ez Tuition, books, supplies, lab fees, and similar items. Turbo tax 1040ez Certain transportation and travel costs. Turbo tax 1040ez Other education expenses, such as costs of research and typing when writing a paper as part of an educational program. Turbo tax 1040ez Nondeductible expenses. Turbo tax 1040ez   You cannot deduct personal or capital expenses. Turbo tax 1040ez For example, you cannot deduct the dollar value of vacation time or annual leave you take to attend classes. Turbo tax 1040ez This amount is a personal expense. Turbo tax 1040ez Unclaimed reimbursement. Turbo tax 1040ez   If you do not claim reimbursement that you are entitled to receive from your employer, you cannot deduct the expenses that apply to that unclaimed reimbursement. Turbo tax 1040ez Example. Turbo tax 1040ez Your employer agrees to pay your education expenses if you file a voucher showing your expenses. Turbo tax 1040ez You do not file a voucher and you do not get reimbursed. Turbo tax 1040ez Because you did not file a voucher, you cannot deduct the expenses on your tax return. Turbo tax 1040ez Transportation Expenses If your education qualifies, you can deduct local transportation costs of going directly from work to school. Turbo tax 1040ez If you are regularly employed and go to school on a temporary basis, you can also deduct the costs of returning from school to home. Turbo tax 1040ez Temporary basis. Turbo tax 1040ez   You go to school on a temporary basis if either of the following situations applies to you. Turbo tax 1040ez Your attendance at school is realistically expected to last 1 year or less and does indeed last for 1 year or less. Turbo tax 1040ez Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Turbo tax 1040ez Your attendance is temporary up to the date you determine it will last more than 1 year. Turbo tax 1040ez If you are in either situation (1) or (2) above, your attendance is not temporary if facts and circumstances indicate otherwise. Turbo tax 1040ez Attendance not on a temporary basis. Turbo tax 1040ez   You do not go to school on a temporary basis if either of the following situations apply to you. Turbo tax 1040ez Your attendance at school is realistically expected to last more than 1 year. Turbo tax 1040ez It does not matter how long you actually attend. Turbo tax 1040ez Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Turbo tax 1040ez Your attendance is not temporary after the date you determine it will last more than 1 year. Turbo tax 1040ez Deductible Transportation Expenses If you are regularly employed and go directly from home to school on a temporary basis, you can deduct the round-trip costs of transportation between your home and school. Turbo tax 1040ez This is true regardless of the location of the school, the distance traveled, or whether you attend school on nonwork days. Turbo tax 1040ez Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. Turbo tax 1040ez Transportation expenses do not include amounts spent for travel, meals, or lodging while you are away from home overnight. Turbo tax 1040ez Example 1. Turbo tax 1040ez You regularly work in a nearby town, and go directly from work to home. Turbo tax 1040ez You also attend school every work night for 3 months to take a course that improves your job skills. Turbo tax 1040ez Since you are attending school on a temporary basis, you can deduct your daily round-trip transportation expenses in going between home and school. Turbo tax 1040ez This is true regardless of the distance traveled. Turbo tax 1040ez Example 2. Turbo tax 1040ez Assume the same facts as in Example 1 except that on certain nights you go directly from work to school and then home. Turbo tax 1040ez You can deduct your transportation expenses from your regular work site to school and then home. Turbo tax 1040ez Example 3. Turbo tax 1040ez Assume the same facts as in Example 1 except that you attend the school for 9 months on Saturdays, nonwork days. Turbo tax 1040ez Since you are attending school on a temporary basis, you can deduct your round-trip transportation expenses in going between home and school. Turbo tax 1040ez Example 4. Turbo tax 1040ez Assume the same facts as in Example 1 except that you attend classes twice a week for 15 months. Turbo tax 1040ez Since your attendance in school is not considered temporary, you cannot deduct your transportation expenses in going between home and school. Turbo tax 1040ez If you go directly from work to school, you can deduct the one-way transportation expenses of going from work to school. Turbo tax 1040ez If you go from work to home to school and return home, your transportation expenses cannot be more than if you had gone directly from work to school. Turbo tax 1040ez Using your car. Turbo tax 1040ez    If you use your car (whether you own or lease it) for transportation to school, you can deduct your actual expenses or use the standard mileage rate to figure the amount you can deduct. Turbo tax 1040ez The standard mileage rate for miles driven from January 1, 2013 through December 31, 2013, is 56. Turbo tax 1040ez 5 cents per mile. Turbo tax 1040ez Whichever method you use, you can also deduct parking fees and tolls. Turbo tax 1040ez See Publication 463, chapter 4, for information on deducting your actual expenses of using a car. Turbo tax 1040ez Travel Expenses You can deduct expenses for travel, meals (see 50% limit on meals , later), and lodging if you travel overnight mainly to obtain qualifying work-related education. Turbo tax 1040ez Travel expenses for qualifying work-related education are treated the same as travel expenses for other employee business purposes. Turbo tax 1040ez For more information, see chapter 1 of Publication 463. Turbo tax 1040ez You cannot deduct expenses for personal activities such as sightseeing, visiting, or entertaining. Turbo tax 1040ez Mainly personal travel. Turbo tax 1040ez   If your travel away from home is mainly personal, you cannot deduct all of your expenses for travel, meals, and lodging. Turbo tax 1040ez You can deduct only your expenses for lodging and 50% of your expenses for meals during the time you attend the qualified educational activities. Turbo tax 1040ez   Whether a trip's purpose is mainly personal or educational depends upon the facts and circumstances. Turbo tax 1040ez An important factor is the comparison of time spent on personal activities with time spent on educational activities. Turbo tax 1040ez If you spend more time on personal activities, the trip is considered mainly educational only if you can show a substantial nonpersonal reason for traveling to a particular location. Turbo tax 1040ez Example 1. Turbo tax 1040ez John works in Newark, New Jersey. Turbo tax 1040ez He traveled to Chicago to take a deductible 1-week course at the request of his employer. Turbo tax 1040ez His main reason for going to Chicago was to take the course. Turbo tax 1040ez While there, he took a sightseeing trip, entertained some friends, and took a side trip to Pleasantville for a day. Turbo tax 1040ez Since the trip was mainly for business, John can deduct his round-trip airfare to Chicago. Turbo tax 1040ez He cannot deduct his transportation expenses of going to Pleasantville. Turbo tax 1040ez He can deduct only the meals (subject to the 50% limit) and lodging connected with his educational activities. Turbo tax 1040ez Example 2. Turbo tax 1040ez Sue works in Boston. Turbo tax 1040ez She went to a university in Michigan to take a course for work. Turbo tax 1040ez The course is qualifying work-related education. Turbo tax 1040ez She took one course, which is one-fourth of a full course load of study. Turbo tax 1040ez She spent the rest of the time on personal activities. Turbo tax 1040ez Her reasons for taking the course in Michigan were all personal. Turbo tax 1040ez Sue's trip is mainly personal because three-fourths of her time is considered personal time. Turbo tax 1040ez She cannot deduct the cost of her round-trip train ticket to Michigan. Turbo tax 1040ez She can deduct one-fourth of the meals (subject to the 50% limit) and lodging costs for the time she attended the university. Turbo tax 1040ez Example 3. Turbo tax 1040ez Dave works in Nashville and recently traveled to California to take a 2-week seminar. Turbo tax 1040ez The seminar is qualifying work-related education. Turbo tax 1040ez While there, he spent an extra 8 weeks on personal activities. Turbo tax 1040ez The facts, including the extra 8-week stay, show that his main purpose was to take a vacation. Turbo tax 1040ez Dave cannot deduct his round-trip airfare or his meals and lodging for the 8 weeks. Turbo tax 1040ez He can deduct only his expenses for meals (subject to the 50% limit) and lodging for the 2 weeks he attended the seminar. Turbo tax 1040ez Cruises and conventions. Turbo tax 1040ez   Certain cruises and conventions offer seminars or courses as part of their itinerary. Turbo tax 1040ez Even if the seminars or courses are work related, your deduction for travel may be limited. Turbo tax 1040ez This applies to: Travel by ocean liner, cruise ship, or other form of luxury water transportation, and Conventions outside the North American area. Turbo tax 1040ez   For a discussion of the limits on travel expense deductions that apply to cruises and conventions, see Luxury Water Travel and Conventions in chapter 1 of Publication 463. Turbo tax 1040ez 50% limit on meals. Turbo tax 1040ez   You can deduct only 50% of the cost of your meals while traveling away from home to obtain qualifying work-related education. Turbo tax 1040ez If you were reimbursed for the meals, see How To Treat Reimbursements , later. Turbo tax 1040ez   Employees must use Form 2106 or Form 2106-EZ to apply the 50% limit. Turbo tax 1040ez Travel as Education You cannot deduct the cost of travel as a form of education even if it is directly related to your duties in your work or business. Turbo tax 1040ez Example. Turbo tax 1040ez You are a French language teacher. Turbo tax 1040ez While on sabbatical leave granted for travel, you traveled through France to improve your knowledge of the French language. Turbo tax 1040ez You chose your itinerary and most of your activities to improve your French language skills. Turbo tax 1040ez You cannot deduct your travel expenses as education expenses. Turbo tax 1040ez This is true even if you spent most of your time learning French by visiting French schools and families, attending movies or plays, and engaging in similar activities. Turbo tax 1040ez No Double Benefit Allowed You cannot do either of the following. Turbo tax 1040ez Deduct work-related education expenses as business expenses if you benefit from these expenses under any other provision of the law, for example, as a tuition and fees deduction. Turbo tax 1040ez Deduct work-related education expenses paid with tax-free scholarship, grant, or employer-provided educational assistance. Turbo tax 1040ez See Adjustments to Qualifying Work-Related Education Expenses, next. Turbo tax 1040ez Adjustments to Qualifying Work-Related Education Expenses If you pay qualifying work-related education expenses with certain tax-free funds, you cannot claim a deduction for those amounts. Turbo tax 1040ez You must reduce the qualifying expenses by the amount of such expenses allocable to the tax-free educational assistance. Turbo tax 1040ez Tax-free educational assistance. Turbo tax 1040ez   This includes: The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions). Turbo tax 1040ez Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Turbo tax 1040ez Amounts that do not reduce qualifying work-related education expenses. Turbo tax 1040ez   Do not reduce the qualifying work-related 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. Turbo tax 1040ez Also, do not reduce the qualifying work-related education expenses by any scholarship or fellowship reported as income on the student's return or any scholarship which, by its terms, cannot be applied to qualifying work-related education expenses. Turbo tax 1040ez How To Treat Reimbursements How you treat reimbursements depends on the arrangement you have with your employer. Turbo tax 1040ez There are two basic types of reimbursement arrangements—accountable plans and nonaccountable plans. Turbo tax 1040ez You can tell the type of plan you are reimbursed under by the way the reimbursement is reported on your Form W-2. Turbo tax 1040ez Note. Turbo tax 1040ez The following rules about reimbursement arrangements also apply to expense allowances received from your employer. Turbo tax 1040ez Accountable Plans To be an accountable plan, your employer's reimbursement arrangement must require you to meet all three of the following rules. Turbo tax 1040ez Your expenses must have a business connection. Turbo tax 1040ez This means your expenses must be deductible under the rules for qualifying work-related education explained earlier. Turbo tax 1040ez You must adequately account to your employer for your expenses within a reasonable period of time. Turbo tax 1040ez You must return any reimbursement or allowance in excess of the expenses accounted for within a reasonable period of time. Turbo tax 1040ez If you are reimbursed under an accountable plan, your employer should not include any reimbursement in your income in box 1 of your Form W-2. Turbo tax 1040ez If your employer included reimbursements in box 1 of your Form W-2 and you meet all three rules for accountable plans, ask your employer for a corrected Form W-2. Turbo tax 1040ez Accountable plan rules not met. Turbo tax 1040ez   Even though you are reimbursed under an accountable plan, some of your expenses may not meet all three rules for accountable plans. Turbo tax 1040ez Those expenses that fail to meet the three rules are treated as having been reimbursed under a Nonaccountable Plan (discussed later). Turbo tax 1040ez Expenses equal reimbursement. Turbo tax 1040ez   Under an accountable plan, if your expenses equal your reimbursement, you do not complete Form 2106 or 2106-EZ. Turbo tax 1040ez Because your expenses and reimbursements are equal, you do not have a deduction. Turbo tax 1040ez Excess expenses. Turbo tax 1040ez   If your expenses are more than your reimbursement, you can deduct your excess expenses. Turbo tax 1040ez This is discussed later, under Deducting Business Expenses . Turbo tax 1040ez Allocating your reimbursements for meals. Turbo tax 1040ez   Because your excess meal expenses are subject to the 50% limit, you must figure them separately from your other expenses. Turbo tax 1040ez If your employer paid you a single amount to cover both meals and other expenses, you must allocate the reimbursement so that you can figure your excess meal expenses separately. Turbo tax 1040ez Make the allocation as follows. Turbo tax 1040ez Divide your meal expenses by your total expenses. Turbo tax 1040ez Multiply your total reimbursement by the result from (1). Turbo tax 1040ez This is the allocated reimbursement for your meal expenses. Turbo tax 1040ez Subtract the amount figured in (2) from your total reimbursement. Turbo tax 1040ez The difference is the allocated reimbursement for your other expenses of qualifying work-related education. Turbo tax 1040ez Example. Turbo tax 1040ez Your employer paid you an expense allowance of $2,000 under an accountable plan. Turbo tax 1040ez The allowance was to cover all of your expenses of traveling away from home to take a 2-week training course for work. Turbo tax 1040ez There was no indication of how much of the reimbursement was for each type of expense. Turbo tax 1040ez Your actual expenses equal $2,500 ($425 for meals + $700 lodging + $150 transportation expenses + $1,225 for books and tuition). Turbo tax 1040ez Using the steps listed above, allocate the reimbursement between the $425 meal expenses and the $2,075 other expenses. Turbo tax 1040ez   1. Turbo tax 1040ez $425 meal expenses  $2,500 total expenses = . Turbo tax 1040ez 17   2. Turbo tax 1040ez $2,000 (reimbursement)×. Turbo tax 1040ez 17     =$340 (allocated reimbursement for meal expenses)   3. Turbo tax 1040ez $2,000 (reimbursement)−$340 (meals)     = $1,660 (allocated reimbursement for other qualifying work-related education expenses) Your excess meal expenses are $85 ($425 − $340) and your excess other expenses are $415 ($2,075 − $1,660). Turbo tax 1040ez After you apply the 50% limit to your meals, you have a deduction for work-related education expenses of $458 (($85 × 50%) + $415). Turbo tax 1040ez Nonaccountable Plans Your employer will combine the amount of any reimbursement or other expense allowance paid to you under a nonaccountable plan with your wages, salary, or other pay and report the total in box 1 of your Form W-2. Turbo tax 1040ez You can deduct your expenses regardless of whether they are more than, less than, or equal to your reimbursement. Turbo tax 1040ez This is discussed later under Deducting Business Expenses . Turbo tax 1040ez An illustrated example of a nonaccountable plan, using Form 2106-EZ, is shown at the end of this chapter. Turbo tax 1040ez Reimbursements for nondeductible expenses. Turbo tax 1040ez   Reimbursements you received for nondeductible expenses are treated as paid under a nonaccountable plan. Turbo tax 1040ez You must include them in your income. Turbo tax 1040ez For example, you must include in your income reimbursements your employer gave you for expenses of education that: You need to meet the minimum educational requirements for your job, or Is part of a program of study that can qualify you for a new trade or business. Turbo tax 1040ez   For more information on accountable and nonaccountable plans, see chapter 6 of Publication 463. Turbo tax 1040ez Deducting Business Expenses Self-employed persons and employees report their business expenses differently. Turbo tax 1040ez The following information explains what forms you must use to deduct the cost of your qualifying work-related education as a business expense. Turbo tax 1040ez Self-Employed Persons If you are self-employed, you must report the cost of your qualifying work-related education on the appropriate form used to report your business income and expenses (generally Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040)). Turbo tax 1040ez If your education expenses include expenses for a car or truck, travel, or meals, report those expenses the same way you report other business expenses for those items. Turbo tax 1040ez See the instructions for the form you file for information on how to complete it. Turbo tax 1040ez Employees If you are an employee, you can deduct the cost of qualifying work-related education only if you: Did not receive (and were not entitled to receive) any reimbursement from your employer, Were reimbursed under a nonaccountable plan (amount is included in box 1 of Form W-2), or Received reimbursement under an accountable plan, but the amount received was less than your expenses for which you claimed reimbursement. Turbo tax 1040ez If either (1) or (2) applies, you can deduct the total qualifying cost. Turbo tax 1040ez If (3) applies, you can deduct only the qualifying costs that were more than your reimbursement. Turbo tax 1040ez In order to deduct the cost of your qualifying work-related education as a business expense, include the amount with your deduction for any other employee business expenses on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. Turbo tax 1040ez (Special rules for expenses of certain performing artists and fee-basis officials and for impairment-related work expenses are explained later. Turbo tax 1040ez ) This deduction (except for impairment-related work expenses of disabled individuals) is subject to the 2%-of-adjusted-gross-income limit that applies to most miscellaneous itemized deductions. Turbo tax 1040ez Form 2106 or 2106-EZ. Turbo tax 1040ez   To figure your deduction for employee business expenses, including qualifying work-related education, you generally must complete Form 2106 or 2106-EZ. Turbo tax 1040ez Form not required. Turbo tax 1040ez   Do not complete either Form 2106 or 2106-EZ if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are not claiming travel, transportation, meal, or entertainment expenses. Turbo tax 1040ez   If you meet both of these requirements, enter the expenses directly on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. Turbo tax 1040ez (Special rules for expenses of certain Performing Artists and Fee-Basis Officials and for Impairment-Related Work Expenses are explained later. Turbo tax 1040ez ) Using Form 2106-EZ. Turbo tax 1040ez   This form is shorter and easier to use than Form 2106. Turbo tax 1040ez Generally, you can use this form if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are using the standard mileage rate if you are claiming vehicle expenses. Turbo tax 1040ez   If you do not meet both of these requirements, use Form 2106. Turbo tax 1040ez Performing Artists and Fee-Basis Officials If you are a qualified performing artist, or a state (or local) government official who is paid in whole or in part on a fee basis, you can deduct the cost of your qualifying work-related education as an adjustment to gross income rather than as an itemized deduction. Turbo tax 1040ez Include the cost of your qualifying work-related education with any other employee business expenses on Form 1040, line 24, or Form 1040NR, line 35. Turbo tax 1040ez You do not have to itemize your deductions on Schedule A (Form 1040 or 1040NR), and, therefore, the deduction is not subject to the 2%-of-adjusted-gross-income limit. Turbo tax 1040ez You must complete Form 2106 or 2106-EZ to figure your deduction even if you meet the requirements described earlier under Form not required . Turbo tax 1040ez For more information on qualified performing artists, see chapter 6 of Publication 463. Turbo tax 1040ez Impairment-Related Work Expenses If you are disabled and have impairment-related work expenses that are necessary for you to be able to get qualifying work-related education, you can deduct these expenses on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14. Turbo tax 1040ez They are not subject to the 2%-of-adjusted-gross-income limit. Turbo tax 1040ez To deduct these expenses, you must complete Form 2106 or 2106-EZ even if you meet the requirements described earlier under Form not required . Turbo tax 1040ez For more information on impairment-related work expenses, see chapter 6 of Publication 463. Turbo tax 1040ez Recordkeeping You must keep records as proof of any deduction claimed on your tax return. Turbo tax 1040ez Generally, you should keep your records for 3 years from the date of filing the tax return and claiming the deduction. Turbo tax 1040ez If you are an employee who is reimbursed for expenses and you give your records and documentation to your employer, you do not have to keep duplicate copies of this information. Turbo tax 1040ez However, you should keep your records for a 3-year period if: You claim deductions for expenses that are more than your reimbursement, Your employer does not use adequate accounting procedures to verify expense accounts, You are related to your employer, or Your expenses are reimbursed under a nonaccountable plan. Turbo tax 1040ez Examples of records to keep. Turbo tax 1040ez   If any of the above cases apply to you, you must be able to prove that your expenses are deductible. Turbo tax 1040ez You should keep adequate records or have sufficient evidence that will support your expenses. Turbo tax 1040ez Estimates or approximations do not qualify as proof of an expense. Turbo tax 1040ez Some examples of what can be used to help prove your expenses are: Documents, such as transcripts, course descriptions, catalogs, etc. Turbo tax 1040ez , showing periods of enrollment in educational institutions, principal subjects studied, and descriptions of educational activity. Turbo tax 1040ez Canceled checks and receipts to verify amounts you spent for: Tuition and books, Meals and lodging while away from home overnight for educational purposes, Travel and transportation, and Other education expenses. Turbo tax 1040ez Statements from your employer explaining whether the education was necessary for you to keep your job, salary, or status; how the education helped maintain or improve skills needed in your job; how much reimbursement you received; and, if you are a teacher, the type of certificate and subjects taught. Turbo tax 1040ez Complete information about any scholarship or fellowship grants, including amounts you received during the year. Turbo tax 1040ez Illustrated Example Victor Jones teaches math at a private high school in North Carolina. Turbo tax 1040ez He was selected to attend a 3-week math seminar at a university in California. Turbo tax 1040ez The seminar will improve his skills in his current job and is qualifying work-related education. Turbo tax 1040ez He was reimbursed for his expenses under his employer's nonaccountable plan, so his reimbursement of $2,100 is included in the wages shown in box 1 of his Form W-2. Turbo tax 1040ez Victor will file Form 1040. Turbo tax 1040ez His actual expenses for the seminar are as follows:   Lodging   $1,050     Meals   526     Airfare   550     Taxi fares   50     Tuition and books   400     Total Expenses   $2,576   Victor files Form 2106-EZ with his tax return. Turbo tax 1040ez He shows his expenses for the seminar in Part I of the form. Turbo tax 1040ez He enters $1,650 ($1,050 + $550 + $50) on line 3 to account for his lodging, airfare, and taxi fares. Turbo tax 1040ez He enters $400 on line 4 for his tuition and books. Turbo tax 1040ez On the line provided for total meals and entertainment expenses, Victor enters $526 for meal expenses. Turbo tax 1040ez He multiplies that amount by 50% and enters the result, $263, on line 5. Turbo tax 1040ez On line 6, Victor totals the amounts from lines 3 through 5. Turbo tax 1040ez He carries the total, $2,313, to Schedule A (Form 1040), line 21. Turbo tax 1040ez Since he does not claim any vehicle expenses, Victor leaves Part II blank. Turbo tax 1040ez His filled-in form is shown on the next page. Turbo tax 1040ez This image is too large to be displayed in the current screen. Turbo tax 1040ez Please click the link to view the image. Turbo tax 1040ez Form 2106-EZ for V. Turbo tax 1040ez Jones Prev  Up  Next   Home   More Online Publications