File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

1080ez

Irs 1040How To Amend 2010 Tax ReturnHow To File TaxesAmended Federal Income Tax ReturnHow To File Tax ExtentionTax AmendmentIrs 1040ez File OnlineHttp Freeb Free1040taxreturn ComState Tax Filing Form1042 EzFile Taxes Online Free H&r BlockFree E-file For 2011How To File State TaxFiling Taxes Online1040ez FreeTurbotax 2009Irs Ez Tax FormVolunteer Income TaxEz FormAmmending TaxesTurbo Tax Amendment 2013Student Taxes 2013Filing An Amended Return For 2013Printable Tax Forms 1040ezFiling Late ReturnsFree Federal And State TaxAmend My 2010 Tax ReturnFree Tax Calculator 2011 H&r BlockHow Do I Amend My Tax ReturnMyfreetaxes Com MaineFile 1040ez OnlineFile A 2011 Tax Return OnlineIrs Form 4868A Software With 1040x2012 Irs Income Tax FormsSchool Tax Forms1040ez 2010 Form PrintableFree Amended Tax ReturnHow Do I Amend My TaxesH&r Block Free State File

1080ez

1080ez Publication 555 - Main Content Table of Contents Domicile Community or Separate Property and Income Identifying Income, Deductions, and CreditsIncome Exemptions Deductions Credits, Taxes, and Payments Community Property Laws DisregardedRequesting relief. 1080ez Equitable relief. 1080ez Earned income. 1080ez Trade or business income. 1080ez Partnership income or loss. 1080ez Separate property income. 1080ez Social security benefits. 1080ez Other income. 1080ez End of the Community Preparing a Federal Income Tax ReturnJoint Return Versus Separate Returns Separate Return Preparation How To Get Tax HelpLow Income Taxpayer Clinics Domicile Whether you have community property and community income depends on the state where you are domiciled. 1080ez If you and your spouse (or your registered domestic partner) have different domiciles, check the laws of each to see whether you have community property or community income. 1080ez You have only one domicile even if you have more than one home. 1080ez Your domicile is a permanent legal home that you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. 1080ez The question of your domicile is mainly a matter of your intention as indicated by your actions. 1080ez You must be able to show that you intend a given place or state to be your permanent home. 1080ez If you move into or out of a community property state during the year, you may or may not have community income. 1080ez Factors considered in determining domicile include: Where you pay state income tax, Where you vote, Location of property you own, Your citizenship, Length of residence, and Business and social ties to the community. 1080ez Amount of time spent. 1080ez    The amount of time spent in one place does not always explain the difference between home and domicile. 1080ez A temporary home or residence may continue for months or years while a domicile may be established the first moment you occupy the property. 1080ez Your intent is the determining factor in proving where you have your domicile. 1080ez    Note. 1080ez When this publication refers to where you live, it means your domicile. 1080ez Community or Separate Property and Income If you file a federal tax return separately from your spouse, you must report half of all community income and all of your separate income. 1080ez Likewise, a registered domestic partner must report half of all community income and all of his or her separate income on his or her federal tax return. 1080ez You each must attach your Form 8958 to your Form 1040 showing how you figured the amount you are reporting on your return. 1080ez Generally, the laws of the state in which you are domiciled govern whether you have community property and community income or separate property and separate income for federal tax purposes. 1080ez The following is a summary of the general rules. 1080ez These rules are also shown in Table 1. 1080ez Community property. 1080ez    Generally, community property is property: That you, your spouse (or your registered domestic partner), or both acquire during your marriage (or registered domestic partnership) while you and your spouse (or your registered domestic partner) are domiciled in a community property state. 1080ez That you and your spouse (or your registered domestic partner) agreed to convert from separate to community property. 1080ez That cannot be identified as separate property. 1080ez Community income. 1080ez    Generally, community income is income from: Community property. 1080ez Salaries, wages, and other pay received for the services performed by you, your spouse (or your registered domestic partner), or both during your marriage (or registered domestic partnership) while domiciled in a community property state. 1080ez Real estate that is treated as community property under the laws of the state where the property is located. 1080ez Note Separate property. 1080ez    Generally, separate property is: Property that you or your spouse (or your registered domestic partner) owned separately before your marriage (or registered domestic partnership). 1080ez Money earned while domiciled in a noncommunity property state. 1080ez Property that you or your spouse (or your registered domestic partner) received separately as a gift or inheritance during your marriage (or registered domestic partnership). 1080ez Property that you or your spouse (or your registered domestic partner) bought with separate funds, or acquired in exchange for separate property, during your marriage (or registered domestic partnership). 1080ez Property that you and your spouse (or your registered domestic partner) converted from community property to separate property through an agreement valid under state law. 1080ez The part of property bought with separate funds, if part was bought with community funds and part with separate funds. 1080ez Separate income. 1080ez    Generally, income from separate property is the separate income of the spouse (or the registered domestic partner) who owns the property. 1080ez    In Idaho, Louisiana, Texas, and Wisconsin, income from most separate property is community income. 1080ez Table 1. 1080ez General Rules — Property and Income: Community or Separate? Community property is property: That you, your spouse (or your registered domestic partner), or both acquire during your marriage (or registered domestic partnership) while you and your spouse (or your registered domestic partner) are domiciled in a community property state. 1080ez (Includes the part of property bought with community property funds if part was bought with community funds and part with separate funds. 1080ez ) That you and your spouse (or your registered domestic partner) agreed to convert from separate to community property. 1080ez That cannot be identified as separate property. 1080ez Separate property is: Property that you or your spouse (or your registered domestic partner) owned separately before your marriage (or registered domestic partnership). 1080ez Money earned while domiciled in a noncommunity property state. 1080ez Property either of you received as a gift or inherited separately during your marriage (or registered domestic partnership). 1080ez Property bought with separate funds, or exchanged for separate property, during your marriage (or registered domestic partnership). 1080ez Property that you and your spouse (or your registered domestic partner) agreed to convert from community to separate property through an agreement valid under state law. 1080ez The part of property bought with separate funds, if part was bought with community funds and part with separate funds. 1080ez Community income 1,2,3 is income from: Community property. 1080ez Salaries, wages, or pay for services of you, your spouse (or your registered domestic partner), or both during your marriage (or registered domestic partnership) while domiciled in a community property state. 1080ez Real estate that is treated as community property under the laws of the state where the property is located. 1080ez Separate income 1,2 is income from: Separate property which belongs to the spouse (or registered domestic partner) who owns the property. 1080ez 1In Idaho, Louisiana, Texas, and Wisconsin, income from most separate property is community income. 1080ez 2Check your state law if you are separated but do not meet the conditions discussed in Spouses living apart all year , later. 1080ez In some states, the income you earn after you are separated and before a divorce decree is issued continues to be community income. 1080ez In other states, it is separate income. 1080ez 3Under special rules, income that can otherwise be characterized as community income may not be treated as community income for federal income tax purposes in certain situations. 1080ez See Community Property Laws Disregarded , later. 1080ez Identifying Income, Deductions, and Credits If you file separate returns, you and your spouse (or your registered domestic partner) each must attach your Form 8958 to your Form 1040 to identify your community and separate income, deductions, credits, and other return amounts according to the laws of your state. 1080ez Under special rules, income that can otherwise be characterized as community income may not be treated as community income for federal income tax purposes in certain situations. 1080ez See Community Property Laws Disregarded, later. 1080ez Check your state law if you are separated but do not meet the conditions discussed in Spouses living apart all year, later. 1080ez In some states, the income you earn after you are separated and before a divorce decree is issued continues to be community income. 1080ez In other states, it is separate income. 1080ez Income The following is a discussion of the general effect of community property laws on the federal income tax treatment of certain items of income. 1080ez Wages, earnings, and profits. 1080ez    A spouse's (or your registered domestic partner's) wages, earnings, and net profits from a sole proprietorship are community income and must be evenly split. 1080ez Dividends, interest, and rents. 1080ez    Dividends, interest, and rents from community property are community income and must be evenly split. 1080ez Dividends, interest, and rents from separate property are characterized in accordance with the discussion under Income from separate property , later. 1080ez Example. 1080ez If you and your spouse (or your registered domestic partner) buy a bond that is considered community property under your state laws, half the bond interest belongs to you and half belongs to your spouse. 1080ez You each must show the bond interest and the split of that interest on your Form 8958, and report half the interest on your Form 1040. 1080ez Attach your Form 8958 to your Form 1040. 1080ez Alimony received. 1080ez    Alimony or separate maintenance payments made prior to divorce are taxable to the payee spouse only to the extent they exceed 50% (his or her share) of the reportable community income. 1080ez This is so because the payee spouse is already required to report half of the community income. 1080ez See also Alimony paid , later. 1080ez Gains and losses. 1080ez    Gains and losses are classified as separate or community depending on how the property is held. 1080ez For example, a loss on separate property, such as stock held separately, is a separate loss. 1080ez On the other hand, a loss on community property, such as a casualty loss to your home held as community property, is a community loss. 1080ez See Publication 544, Sales and Other Dispositions of Assets, for information on gains and losses. 1080ez See Publication 547, Casualties, Disasters, and Thefts, for information on losses due to a casualty or theft. 1080ez Withdrawals from individual retirement arrangements (IRAs) and Coverdell Education Savings Accounts (ESAs). 1080ez    There are several kinds of individual retirement arrangements (IRAs). 1080ez They are traditional IRAs (including SEP-IRAs), SIMPLE IRAs, and Roth IRAs. 1080ez IRAs and ESAs by law are deemed to be separate property. 1080ez Therefore, taxable IRA and ESA distributions are separate property, even if the funds in the account would otherwise be community property. 1080ez These distributions are wholly taxable to the spouse (or registered domestic partner) whose name is on the account. 1080ez That spouse (or registered domestic partner) is also liable for any penalties and additional taxes on the distributions. 1080ez Pensions. 1080ez    Generally, distributions from pensions will be characterized as community or separate income depending on the respective periods of participation in the pension while married (or during the registered domestic partnership) and domiciled in a community property state or in a noncommunity property state during the total period of participation in the pension. 1080ez See the example under Civil service retirement , later. 1080ez These rules may vary between states. 1080ez Check your state law. 1080ez Lump-sum distributions. 1080ez    If you were born before January 2, 1936, and receive a lump-sum distribution from a qualified retirement plan, you may be able to choose an optional method of figuring the tax on the distribution. 1080ez For the 10-year tax option, you must disregard community property laws. 1080ez For more information, see Publication 575, Pension and Annuity Income, and Form 4972, Tax on Lump-Sum Distributions. 1080ez Civil service retirement. 1080ez    For income tax purposes, community property laws apply to annuities payable under the Civil Service Retirement Act (CSRS) or Federal Employee Retirement System (FERS). 1080ez   Whether a civil service annuity is separate or community income depends on your marital status (or your status as a registered domestic partner) and domicile of the employee when the services were performed for which the annuity is paid. 1080ez Even if you now live in a noncommunity property state and you receive a civil service annuity, it may be community income if it is based on services you performed while married (or during the registered domestic partnership) and domiciled in a community property state. 1080ez   If a civil service annuity is a mixture of community income and separate income, it must be divided between the two kinds of income. 1080ez The division is based on the employee's domicile and marital status (or registered domestic partnership) in community and noncommunity property states during his or her periods of service. 1080ez Example. 1080ez Henry Wright retired this year after 30 years of civil service. 1080ez He and his wife were domiciled in a community property state during the past 15 years. 1080ez Since half the service was performed while the Wrights were married and domiciled in a community property state, half the civil service retirement pay is considered to be community income. 1080ez If Mr. 1080ez Wright receives $1,000 a month in retirement pay, $500 is considered community income—half ($250) is his income and half ($250) is his wife's. 1080ez Military retirement pay. 1080ez    State community property laws apply to military retirement pay. 1080ez Generally, the pay is either separate or community income based on the marital status and domicile of the couple while the member of the Armed Forces was in active military service. 1080ez For example, military retirement pay for services performed during marriage and domicile in a community property state is community income. 1080ez   Active military pay earned while married and domiciled in a community property state is also community income. 1080ez This income is considered to be received half by the member of the Armed Forces and half by the spouse. 1080ez Partnership income. 1080ez    If an interest is held in a partnership, and income from the partnership is attributable to the efforts of either spouse (or registered domestic partner), the partnership income is community property. 1080ez If it is merely a passive investment in a separate property partnership, the partnership income will be characterized in accordance with the discussion under Income from separate property , later. 1080ez Tax-exempt income. 1080ez    For spouses, community income exempt from federal tax generally keeps its exempt status for both spouses. 1080ez For example, under certain circumstances, income earned outside the United States is tax exempt. 1080ez If you earned income and met the conditions that made it exempt, the income is also exempt for your spouse even though he or she may not have met the conditions. 1080ez Registered domestic partners should consult the particular exclusion provision to see if the exempt status applies to both. 1080ez Income from separate property. 1080ez    In some states, income from separate property is separate income. 1080ez These states include Arizona, California, Nevada, New Mexico, and Washington. 1080ez Other states characterize income from separate property as community income. 1080ez These states include Idaho, Louisiana, Texas, and Wisconsin. 1080ez Exemptions When you file separate returns, you must claim your own exemption amount for that year. 1080ez (See your tax return instructions. 1080ez ) You cannot divide the amount allowed as an exemption for a dependent between you and your spouse (or your registered domestic partner). 1080ez When community funds provide support for more than one person, each of whom otherwise qualifies as a dependent, you and your spouse (or your registered domestic partner) may divide the number of dependency exemptions as explained in the following example. 1080ez Example. 1080ez Ron and Diane White have three dependent children and live in Nevada. 1080ez If Ron and Diane file separately, only Ron can claim his own exemption, and only Diane can claim her own exemption. 1080ez Ron and Diane can agree that one of them will claim the exemption for one, two, or all of their children and the other will claim any remaining exemptions. 1080ez They cannot each claim half of the total exemption amount for their three children. 1080ez Deductions If you file separate returns, your deductions generally depend on whether the expenses involve community or separate income. 1080ez Business and investment expenses. 1080ez    If you file separate returns, expenses incurred to earn or produce community business or investment income are generally divided equally between you and your spouse (or your registered domestic partner). 1080ez Each of you is entitled to deduct one-half of the expenses on your separate returns. 1080ez Expenses incurred by a spouse (or registered domestic partner) to produce separate business or investment income is deductible by the spouse (or the registered domestic partner) who earns the corresponding separate business or investment income. 1080ez    Other limits may also apply to business and investment expenses. 1080ez For more information, see Publication 535, Business Expenses, and Publication 550, Investment Income and Expenses. 1080ez Alimony paid. 1080ez    Payments that may otherwise qualify as alimony are not deductible by the payer if they are the recipient spouse's part of community income. 1080ez They are deductible as alimony only to the extent they are more than that spouse's part of community income. 1080ez Example. 1080ez You live in a community property state. 1080ez You are separated but the special rules explained later under Spouses living apart all year do not apply. 1080ez Under a written agreement, you pay your spouse $12,000 of your $20,000 total yearly community income. 1080ez Your spouse receives no other community income. 1080ez Under your state law, earnings of a spouse living separately and apart from the other spouse continue as community property. 1080ez On your separate returns, each of you must report $10,000 of the total community income. 1080ez In addition, your spouse must report $2,000 as alimony received. 1080ez You can deduct $2,000 as alimony paid. 1080ez IRA deduction. 1080ez    Deductions for IRA contributions cannot be split between spouses (or registered domestic partners). 1080ez The deduction for each spouse (or each registered domestic partner) is figured separately and without regard to community property laws. 1080ez Personal expenses. 1080ez   Expenses that are paid out of separate funds, such as medical expenses, are deductible by the spouse who pays them. 1080ez If these expenses are paid from community funds, divide the deduction equally between you and your spouse. 1080ez Credits, Taxes, and Payments The following is a discussion of the general effect of community property laws on the treatment of certain credits, taxes, and payments on your separate return. 1080ez Child tax credit. 1080ez    You may be entitled to a child tax credit for each of your qualifying children. 1080ez You must provide the name and identification number (usually the social security number) of each qualifying child on your return. 1080ez See your tax return instructions for the maximum amount of the credit you can claim for each qualifying child. 1080ez Limit on credit. 1080ez    The credit is limited if your modified adjusted gross income (modified AGI) is above a certain amount. 1080ez The amount at which the limitation (phaseout) begins depends on your filing status. 1080ez Generally, your credit is limited to your tax liability unless you have three or more qualifying children. 1080ez See your tax return instructions for more information. 1080ez Self-employment tax. 1080ez    For the effect of community property laws on the income tax treatment of income from a sole proprietorship and partnerships, see Wages, earnings, and profits and Partnership income , earlier. 1080ez The following rules only apply to persons married for federal tax purposes. 1080ez Registered domestic partners report community income for self-employment tax purposes the same way they do for income tax purposes. 1080ez Sole proprietorship. 1080ez    With regard to net income from a trade or business (other than a partnership) that is community income, self-employment tax is imposed on the spouse carrying on the trade or business. 1080ez Partnerships. 1080ez    All of the distributive share of a married partner's income or loss from a partnership trade or business is attributable to the partner for computing any self-employment tax, even if a portion of the partner's distributive share of income or loss is community income or loss that is otherwise attributable to the partner's spouse for income tax purposes. 1080ez If both spouses are partners, any self-employment tax is allocated based on their distributive shares. 1080ez Federal income tax withheld. 1080ez    Report the credit for federal income tax withheld on community wages in the same manner as your wages. 1080ez If you and your spouse file separate returns on which each of you reports half the community wages, each of you is entitled to credit for half the income tax withheld on those wages. 1080ez Likewise, each registered domestic partner is entitled to credit for half the income tax withheld on those wages. 1080ez Estimated tax payments. 1080ez    In determining whether you must pay estimated tax, apply the estimated tax rules to your estimated income. 1080ez These rules are explained in Publication 505. 1080ez   If you think you may owe estimated tax and want to pay the tax separately (registered domestic partners must pay the tax separately), determine whether you must pay it by taking into account: Half the community income and deductions, All of your separate income and deductions, and Your own exemption and any exemptions for dependents that you may claim. 1080ez   Whether you and your spouse pay estimated tax jointly or separately will not affect your choice of filing joint or separate income tax returns. 1080ez   If you and your spouse paid estimated tax jointly but file separate income tax returns, either of you can claim all of the estimated tax paid, or you may divide it between you in any way that you agree upon. 1080ez   If you cannot agree on how to divide it, the estimated tax you can claim equals the total estimated tax paid times the tax shown on your separate return, divided by the total of the tax shown on your return and your spouse's return. 1080ez   If you paid your estimated taxes separately, you get credit for only the estimated taxes you paid. 1080ez Earned income credit. 1080ez    You may be entitled to an earned income credit (EIC). 1080ez You cannot claim this credit if your filing status is married filing separately. 1080ez   If you are married, but qualify to file as head of household under rules for married taxpayers living apart (see Publication 501, Exemptions, Standard Deduction, and Filing Information), and live in a state that has community property laws, your earned income for the EIC does not include any amount earned by your spouse that is treated as belonging to you under community property laws. 1080ez That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. 1080ez Your earned income includes the entire amount you earned, even if part of it is treated as belonging to your spouse under your state's community property laws. 1080ez The same rule applies to registered domestic partners. 1080ez    This rule does not apply when determining your adjusted gross income (AGI) for the EIC. 1080ez Your AGI includes that part of both your and your spouse's (or your registered domestic partner's) wages that you are required to include in gross income shown on your tax return. 1080ez   For more information about the EIC, see Publication 596, Earned Income Credit (EIC). 1080ez Overpayments. 1080ez    The amount of an overpayment on a joint return is allocated under the community property laws of the state in which you are domiciled. 1080ez If, under the laws of your state, community property is subject to premarital or other separate debts of either spouse, the full joint overpayment may be used to offset the obligation. 1080ez If, under the laws of your state, community property is not subject to premarital or other separate debts of either spouse, only the portion of the joint overpayment allocated to the spouse liable for the obligation can be used to offset that liability. 1080ez The portion allocated to the other spouse can be refunded. 1080ez Community Property Laws Disregarded The following discussions are situations where special rules apply to community property and community income for spouses. 1080ez These rules do not apply to registered domestic partners. 1080ez Certain community income not treated as community income by one spouse. 1080ez    Community property laws may not apply to an item of community income that you received but did not treat as community income. 1080ez You are responsible for reporting all of that income item if: You treat the item as if only you are entitled to the income, and You do not notify your spouse of the nature and amount of the income by the due date for filing the return (including extensions). 1080ez Relief from liability arising from community property law. 1080ez    You are not responsible for the tax relating to an item of community income if all the following conditions are met. 1080ez You did not file a joint return for the tax year. 1080ez You did not include an item of community income in gross income. 1080ez The item of community income you did not include is one of the following: Wages, salaries, and other compensation your spouse (or former spouse) received for services he or she performed as an employee. 1080ez Income your spouse (or former spouse) derived from a trade or business he or she operated as a sole proprietor. 1080ez Your spouse's (or former spouse's) distributive share of partnership income. 1080ez Income from your spouse's (or former spouse's) separate property (other than income described in (a), (b), or (c)). 1080ez Use the appropriate community property law to determine what is separate property. 1080ez Any other income that belongs to your spouse (or former spouse) under community property law. 1080ez You establish that you did not know of, and had no reason to know of, that community income. 1080ez Under all facts and circumstances, it would not be fair to include the item of community income in your gross income. 1080ez Requesting relief. 1080ez    For information on how and when to request relief from liabilities arising from community property laws, see Community Property Laws in Publication 971, Innocent Spouse Relief. 1080ez Equitable relief. 1080ez    If you do not qualify for the relief discussed earlier under Relief from liability arising from community property law and are now liable for an underpaid or understated tax you believe should be paid only by your spouse (or former spouse), you may request equitable relief. 1080ez To request equitable relief, you must file Form 8857, Request for Innocent Spouse Relief. 1080ez Also see Publication 971. 1080ez Spousal agreements. 1080ez    In some states a married couple may enter into an agreement that affects the status of property or income as community or separate property. 1080ez Check your state law to determine how it affects you. 1080ez Nonresident alien spouse. 1080ez    If you are a U. 1080ez S. 1080ez citizen or resident alien and you choose to treat your nonresident alien spouse as a U. 1080ez S. 1080ez resident for tax purposes and you are domiciled in a community property state or country, use the community property rules. 1080ez You must file a joint return for the year you make the choice. 1080ez You can file separate returns in later years. 1080ez For details on making this choice, see Publication 519, U. 1080ez S. 1080ez Tax Guide for Aliens. 1080ez   If you are a U. 1080ez S. 1080ez citizen or resident alien and do not choose to treat your nonresident alien spouse as a U. 1080ez S. 1080ez resident for tax purposes, treat your community income as explained next under Spouses living apart all year. 1080ez However, you do not have to meet the four conditions discussed there. 1080ez Spouses living apart all year. 1080ez    If you are married at any time during the calendar year, special rules apply for reporting certain community income. 1080ez You must meet all the following conditions for these special rules to apply. 1080ez You and your spouse lived apart all year. 1080ez You and your spouse did not file a joint return for a tax year beginning or ending in the calendar year. 1080ez You and/or your spouse had earned income for the calendar year that is community income. 1080ez You and your spouse have not transferred, directly or indirectly, any of the earned income in condition (3) above between yourselves before the end of the year. 1080ez Do not take into account transfers satisfying child support obligations or transfers of very small amounts or value. 1080ez If all these conditions are met, you and your spouse must report your community income as discussed next. 1080ez See also Certain community income not treated as community income by one spouse , earlier. 1080ez Earned income. 1080ez    Treat earned income that is not trade or business or partnership income as the income of the spouse who performed the services to earn the income. 1080ez Earned income is wages, salaries, professional fees, and other pay for personal services. 1080ez   Earned income does not include amounts paid by a corporation that are a distribution of earnings and profits rather than a reasonable allowance for personal services rendered. 1080ez Trade or business income. 1080ez    Treat income and related deductions from a trade or business that is not a partnership as those of the spouse carrying on the trade or business. 1080ez Partnership income or loss. 1080ez    Treat income or loss from a trade or business carried on by a partnership as the income or loss of the spouse who is the partner. 1080ez Separate property income. 1080ez    Treat income from the separate property of one spouse as the income of that spouse. 1080ez Social security benefits. 1080ez    Treat social security and equivalent railroad retirement benefits as the income of the spouse who receives the benefits. 1080ez Other income. 1080ez    Treat all other community income, such as dividends, interest, rents, royalties, or gains, as provided under your state's community property law. 1080ez Example. 1080ez George and Sharon were married throughout the year but did not live together at any time during the year. 1080ez Both domiciles were in a community property state. 1080ez They did not file a joint return or transfer any of their earned income between themselves. 1080ez During the year their incomes were as follows:   George Sharon Wages $20,000 $22,000 Consulting business 5,000   Partnership   10,000 Dividends from separate property 1,000 2,000 Interest from community property 500 500 Total $26,500 $34,500 Under the community property law of their state, all the income is considered community income. 1080ez (Some states treat income from separate property as separate income—check your state law. 1080ez ) Sharon did not take part in George's consulting business. 1080ez Ordinarily, on their separate returns they would each report $30,500, half the total community income of $61,000 ($26,500 + $34,500). 1080ez But because they meet the four conditions listed earlier under Spouses living apart all year , they must disregard community property law in reporting all their income (except the interest income) from community property. 1080ez They each report on their returns only their own earnings and other income, and their share of the interest income from community property. 1080ez George reports $26,500 and Sharon reports $34,500. 1080ez Other separated spouses. 1080ez    If you and your spouse are separated but do not meet the four conditions discussed earlier under Spouses living apart all year , you must treat your income according to the laws of your state. 1080ez In some states, income earned after separation but before a decree of divorce continues to be community income. 1080ez In other states, it is separate income. 1080ez End of the Community The marital community may end in several ways. 1080ez When the marital community ends, the community assets (money and property) are divided between the spouses. 1080ez Similarly, a registered domestic partnership may end in several ways and the community assets must be divided between the registered domestic partners. 1080ez Death of spouse. 1080ez    If you own community property and your spouse dies, the total fair market value (FMV) of the community property, including the part that belongs to you, generally becomes the basis of the entire property. 1080ez For this rule to apply, at least half the value of the community property interest must be includible in your spouse's gross estate, whether or not the estate must file a return (this rule does not apply to registered domestic partners). 1080ez Example. 1080ez Bob and Ann owned community property that had a basis of $80,000. 1080ez When Bob died, his and Ann's community property had an FMV of $100,000. 1080ez One-half of the FMV of their community interest was includible in Bob's estate. 1080ez The basis of Ann's half of the property is $50,000 after Bob died (half of the $100,000 FMV). 1080ez The basis of the other half to Bob's heirs is also $50,000. 1080ez   For more information about the basis of assets, see Publication 551, Basis of Assets. 1080ez    The above basis rule does not apply if your spouse died in 2010 and the spouse's executor elected out of the estate tax, in which case section 1022 will apply. 1080ez See Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, for additional information. 1080ez Divorce or separation. 1080ez    If spouses divorce or separate, the (equal or unequal) division of community property in connection with the divorce or property settlement does not result in a gain or loss. 1080ez For registered domestic partners, an unequal division of community property in a property settlement may result in a gain or loss. 1080ez For information on the tax consequences of the division of property under a property settlement or divorce decree, see Publication 504. 1080ez   Each spouse (or each registered domestic partner) is taxed on half the community income for the part of the year before the community ends. 1080ez However, see Spouses living apart all year , earlier. 1080ez Any income received after the community ends is separate income. 1080ez This separate income is taxable only to the spouse (or the registered domestic partner) to whom it belongs. 1080ez   An absolute decree of divorce or annulment ends the marital community in all community property states. 1080ez A decree of annulment, even though it holds that no valid marriage ever existed, usually does not nullify community property rights arising during the “marriage. 1080ez ” However, you should check your state law for exceptions. 1080ez   A decree of legal separation or of separate maintenance may or may not end the marital community. 1080ez The court issuing the decree may terminate the marital community and divide the property between the spouses. 1080ez   A separation agreement may divide the community property between you and your spouse. 1080ez It may provide that this property, along with future earnings and property acquired, will be separate property. 1080ez This agreement may end the community. 1080ez   In some states, the marital community ends when the spouses permanently separate, even if there is no formal agreement. 1080ez Check your state law. 1080ez   If you are a registered domestic partner, you should check your state law to determine when the community ends. 1080ez Preparing a Federal Income Tax Return The following discussion does not apply to spouses who meet the conditions under Spouses living apart all year , discussed earlier. 1080ez Those spouses must report their community income as explained in that discussion. 1080ez Joint Return Versus Separate Returns Ordinarily, filing a joint return will give you a greater tax advantage than filing a separate return. 1080ez But in some cases, your combined income tax on separate returns may be less than it would be on a joint return. 1080ez This discussion concerning joint versus separate returns does not apply to registered domestic partners. 1080ez The following rules apply if your filing status is married filing separately. 1080ez You should itemize deductions if your spouse itemizes deductions, because you cannot claim the standard deduction. 1080ez You cannot take the credit for child and dependent care expenses in most instances. 1080ez You cannot take the earned income credit. 1080ez You cannot exclude any interest income from qualified U. 1080ez S. 1080ez savings bonds that you used for higher education expenses. 1080ez You cannot take the credit for the elderly or the disabled unless you lived apart from your spouse all year. 1080ez You may have to include in income more of any social security benefits (including any equivalent railroad retirement benefits) you received during the year than you would on a joint return. 1080ez You cannot deduct interest paid on a qualified student loan. 1080ez You cannot take the education credits. 1080ez You may have a smaller child tax credit than you would on a joint return. 1080ez You cannot take the exclusion or credit for adoption expenses in most instances. 1080ez Figure your tax both on a joint return and on separate returns under the community property laws of your state. 1080ez You can then compare the tax figured under both methods and use the one that results in less tax. 1080ez Separate Return Preparation If you file separate returns, you and your spouse must each report half of your combined community income and deductions in addition to your separate income and deductions. 1080ez Each of you must complete and attach Form 8958 to your Form 1040 showing how you figured the amount you are reporting on your return. 1080ez On the appropriate lines of your separate Form 1040, list only your share of the income and deductions on the appropriate lines of your separate tax returns (wages, interest, dividends, etc. 1080ez ). 1080ez The same reporting rule applies to registered domestic partners. 1080ez For a discussion of the effect of community property laws on certain items of income, deductions, credits, and other return amounts, see Identifying Income, Deductions, and Credits , earlier. 1080ez Attach your Form 8958 to your separate return showing how you figured the income, deductions, and federal income tax withheld that each of you reported. 1080ez Form 8958 is used for married spouses in community property states who choose to file married filing separately. 1080ez Form 8958 is also used for registered domestic partners who are domiciled in Nevada, Washington, or California. 1080ez A registered domestic partner in Nevada, Washington, or California must follow state community property laws and report half the combined community income of the individual and his or her registered domestic partner. 1080ez Extension of time to file. 1080ez    An extension of time for filing your separate return does not extend the time for filing your spouse's (or your registered domestic partner's) separate return. 1080ez If you and your spouse file a joint return, you cannot file separate returns after the due date for filing either separate return has passed. 1080ez How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. 1080ez Free help with your tax return. 1080ez    You can get free help preparing your return nationwide from IRS-certified volunteers. 1080ez The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. 1080ez The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 1080ez Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 1080ez In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. 1080ez To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. 1080ez gov, download the IRS2Go app, or call 1-800-906-9887. 1080ez   As part of the TCE program, AARP offers the Tax-Aide counseling program. 1080ez To find the nearest AARP Tax-Aide site, visit AARP's website at www. 1080ez aarp. 1080ez org/money/taxaide or call 1-888-227-7669. 1080ez For more information on these programs, go to IRS. 1080ez gov and enter “VITA” in the search box. 1080ez Internet. 1080ez    IRS. 1080ez gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. 1080ez Download the free IRS2Go app from the iTunes app store or from Google Play. 1080ez Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. 1080ez Check the status of your 2013 refund with the Where's My Refund? application on IRS. 1080ez gov or download the IRS2Go app and select the Refund Status option. 1080ez The IRS issues more than 9 out of 10 refunds in less than 21 days. 1080ez Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. 1080ez You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. 1080ez The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. 1080ez Use the Interactive Tax Assistant (ITA) to research your tax questions. 1080ez No need to wait on the phone or stand in line. 1080ez The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. 1080ez When you reach the response screen, you can print the entire interview and the final response for your records. 1080ez New subject areas are added on a regular basis. 1080ez  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. 1080ez gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. 1080ez You can use the IRS Tax Map, to search publications and instructions by topic or keyword. 1080ez The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. 1080ez When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. 1080ez Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. 1080ez You can also ask the IRS to mail a return or an account transcript to you. 1080ez Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. 1080ez gov or by calling 1-800-908-9946. 1080ez Tax return and tax account transcripts are generally available for the current year and the past three years. 1080ez Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. 1080ez Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. 1080ez If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. 1080ez Check the status of your amended return using Where's My Amended Return? Go to IRS. 1080ez gov and enter Where's My Amended Return? in the search box. 1080ez You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. 1080ez It can take up to 3 weeks from the date you mailed it to show up in our system. 1080ez Make a payment using one of several safe and convenient electronic payment options available on IRS. 1080ez gov. 1080ez Select the Payment tab on the front page of IRS. 1080ez gov for more information. 1080ez Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. 1080ez Figure your income tax withholding with the IRS Withholding Calculator on IRS. 1080ez gov. 1080ez Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. 1080ez Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. 1080ez gov. 1080ez Request an Electronic Filing PIN by going to IRS. 1080ez gov and entering Electronic Filing PIN in the search box. 1080ez Download forms, instructions and publications, including accessible versions for people with disabilities. 1080ez Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. 1080ez gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. 1080ez An employee can answer questions about your tax account or help you set up a payment plan. 1080ez Before you visit, check the Office Locator on IRS. 1080ez gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. 1080ez If you have a special need, such as a disability, you can request an appointment. 1080ez Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. 1080ez Apply for an Employer Identification Number (EIN). 1080ez Go to IRS. 1080ez gov and enter Apply for an EIN in the search box. 1080ez Read the Internal Revenue Code, regulations, or other official guidance. 1080ez Read Internal Revenue Bulletins. 1080ez Sign up to receive local and national tax news and more by email. 1080ez Just click on “subscriptions” above the search box on IRS. 1080ez gov and choose from a variety of options. 1080ez    Phone. 1080ez You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. 1080ez Download the free IRS2Go app from the iTunes app store or from Google Play. 1080ez Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. 1080ez gov, or download the IRS2Go app. 1080ez Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 1080ez The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 1080ez Most VITA and TCE sites offer free electronic filing. 1080ez Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. 1080ez Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. 1080ez Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. 1080ez If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. 1080ez The IRS issues more than 9 out of 10 refunds in less than 21 days. 1080ez Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. 1080ez Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. 1080ez The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. 1080ez Note, the above information is for our automated hotline. 1080ez Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. 1080ez Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. 1080ez You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. 1080ez It can take up to 3 weeks from the date you mailed it to show up in our system. 1080ez Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). 1080ez You should receive your order within 10 business days. 1080ez Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. 1080ez If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. 1080ez Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. 1080ez The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. 1080ez These individuals can also contact the IRS through relay services such as the Federal Relay Service. 1080ez    Walk-in. 1080ez You can find a selection of forms, publications and services — in-person. 1080ez Products. 1080ez You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. 1080ez Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. 1080ez Services. 1080ez You can walk in to your local TAC for face-to-face tax help. 1080ez An employee can answer questions about your tax account or help you set up a payment plan. 1080ez Before visiting, use the Office Locator tool on IRS. 1080ez gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. 1080ez    Mail. 1080ez You can send your order for forms, instructions, and publications to the address below. 1080ez You should receive a response within 10 business days after your request is received. 1080ez Internal Revenue Service 1201 N. 1080ez Mitsubishi Motorway Bloomington, IL 61705-6613   The Taxpayer Advocate Service Is Here to Help You. 1080ez The Taxpayer Advocate Service (TAS) is your voice at the IRS. 1080ez Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. 1080ez   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. 1080ez We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. 1080ez You face (or your business is facing) an immediate threat of adverse action. 1080ez You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. 1080ez   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. 1080ez Here's why we can help: TAS is an independent organization within the IRS. 1080ez Our advocates know how to work with the IRS. 1080ez Our services are free and tailored to meet your needs. 1080ez We have offices in every state, the District of Columbia, and Puerto Rico. 1080ez   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. 1080ez irs. 1080ez gov/advocate, or call us toll-free at 1-877-777-4778. 1080ez   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. 1080ez If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. 1080ez irs. 1080ez gov/sams. 1080ez Low Income Taxpayer Clinics Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. 1080ez Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. 1080ez Visit www. 1080ez irs. 1080ez gov/litc or see IRS Publication 4134, Low Income Taxpayer Clinic List. 1080ez Prev  Up  Next   Home   More Online Publications
Español

Higher Education

Find government information on higher education, including accredited colleges and universities, financial aid, GI bill enrollment, GPA calculator, grants, fellowships, studying abroad, tax benefits and more.

The 1080ez

1080ez 19. 1080ez   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. 1080ez This chapter covers the student loan interest deduction, tuition and fees deduction, and the deduction for educator expenses. 1080ez 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. 1080ez 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. 1080ez 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. 1080ez This deduction can reduce the amount of your income subject to tax by up to $2,500 in 2013. 1080ez Table 19-1 summarizes the features of the student loan interest deduction. 1080ez Table 19-1. 1080ez Student Loan Interest Deduction at a Glance Do not rely on this table alone. 1080ez Refer to the text for more details. 1080ez Feature Description Maximum benefit You can reduce your income subject to tax by up to $2,500. 1080ez 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. 1080ez 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. 1080ez Time limit on deduction You can deduct interest paid during the remaining period of your student loan. 1080ez Phaseout The amount of your deduction depends on your income level. 1080ez Student Loan Interest Defined Student loan interest is interest you paid during the year on a qualified student loan. 1080ez It includes both required and voluntary interest payments. 1080ez 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. 1080ez Loans from the following sources are not qualified student loans. 1080ez A related person. 1080ez A qualified employer plan. 1080ez Exceptions. 1080ez   For purposes of the student loan interest deduction, the following are exceptions to the general rules for dependents. 1080ez An individual can be your dependent even if you are the dependent of another taxpayer. 1080ez An individual can be your dependent even if the individual files a joint return with a spouse. 1080ez 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). 1080ez    Reasonable period of time. 1080ez   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. 1080ez   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. 1080ez The expenses relate to a specific academic period. 1080ez 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. 1080ez   If neither of the above situations applies, the reasonable period of time is determined based on all the relevant facts and circumstances. 1080ez Academic period. 1080ez   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. 1080ez 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. 1080ez Eligible student. 1080ez   This is a student who was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. 1080ez Enrolled at least half-time. 1080ez   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. 1080ez   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. 1080ez However, the standard may not be lower than any of those established by the U. 1080ez S. 1080ez Department of Education under the Higher Education Act of 1965. 1080ez Related person. 1080ez   You cannot deduct interest on a loan you get from a related person. 1080ez Related persons include: Your spouse, Your brothers and sisters, Your half brothers and half sisters, Your ancestors (parents, grandparents, etc. 1080ez ), Your lineal descendants (children, grandchildren, etc. 1080ez ), and Certain corporations, partnerships, trusts, and exempt organizations. 1080ez Qualified employer plan. 1080ez   You cannot deduct interest on a loan made under a qualified employer plan or under a contract purchased under such a plan. 1080ez 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. 1080ez They include amounts paid for the following items. 1080ez Tuition and fees. 1080ez Room and board. 1080ez Books, supplies, and equipment. 1080ez Other necessary expenses (such as transportation). 1080ez 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. 1080ez Eligible educational institution. 1080ez   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. 1080ez S. 1080ez Department of Education. 1080ez It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. 1080ez   Certain educational institutions located outside the United States also participate in the U. 1080ez S. 1080ez Department of Education's Federal Student Aid (FSA) programs. 1080ez   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. 1080ez   An educational institution must meet the above criteria only during the academic period(s) for which the student loan was incurred. 1080ez The deductibility of interest on the loan is not affected by the institution's subsequent loss of eligibility. 1080ez    The educational institution should be able to tell you if it is an eligible educational institution. 1080ez Adjustments to qualified education expenses. 1080ez   You must reduce your qualified education expenses by certain tax-free items (such as the tax-free part of scholarships and fellowships). 1080ez See chapter 4 of Publication 970 for details. 1080ez 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. 1080ez Loan origination fee. 1080ez   In general, this is a one-time fee charged by the lender when a loan is made. 1080ez 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. 1080ez A loan origination fee treated as interest accrues over the life of the loan. 1080ez Capitalized interest. 1080ez    This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. 1080ez Interest on revolving lines of credit. 1080ez   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. 1080ez See Qualified Education Expenses , earlier. 1080ez Interest on refinanced student loans. 1080ez   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. 1080ez 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. 1080ez Voluntary interest payments. 1080ez   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. 1080ez Do Not Include as Interest You cannot claim a student loan interest deduction for any of the following items. 1080ez Interest you paid on a loan if, under the terms of the loan, you are not legally obligated to make interest payments. 1080ez Loan origination fees that are payments for property or services provided by the lender, such as commitment fees or processing costs. 1080ez 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. 1080ez For more information, see Student Loan Repayment Assistance in chapter 5 of Publication 970. 1080ez Can You Claim the Deduction Generally, you can claim the deduction if all of the following requirements are met. 1080ez Your filing status is any filing status except married filing separately. 1080ez No one else is claiming an exemption for you on his or her tax return. 1080ez You are legally obligated to pay interest on a qualified student loan. 1080ez You paid interest on a qualified student loan. 1080ez Interest paid by others. 1080ez   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. 1080ez See chapter 4 of Publication 970 for more information. 1080ez 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). 1080ez 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. 1080ez 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). 1080ez 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). 1080ez For details on figuring your MAGI, see chapter 4 of Publication 970. 1080ez 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. 1080ez 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. 1080ez To help you figure your student loan interest deduction, you should receive Form 1098-E, Student Loan Interest Statement. 1080ez 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. 1080ez 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. 1080ez Other interest payments, such as certain loan origination fees and capitalized interest, may not appear on the form you receive. 1080ez However, if you pay qualifying interest that is not included on Form 1098-E, you can also deduct those amounts. 1080ez For information on allocating payments between interest and principal, see chapter 4 of Publication 970. 1080ez To claim the deduction, enter the allowable amount on Form 1040, line 33, or Form 1040A, line 18. 1080ez 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). 1080ez 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. 1080ez The qualified expenses must be for higher education, as explained later under What Expenses Qualify . 1080ez The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. 1080ez Table 19-2 summarizes the features of the tuition and fees deduction. 1080ez You may be able to take a credit for your education expenses instead of a deduction. 1080ez You can choose the one that will give you the lower tax. 1080ez See chapter 35, Education Credits, for details about the credits. 1080ez Can You Claim the Deduction The following rules will help you determine if you can claim the tuition and fees deduction. 1080ez Who Can Claim the Deduction Generally, you can claim the tuition and fees deduction if all three of the following requirements are met. 1080ez 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. 1080ez You paid the education expenses for an eligible student. 1080ez The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption (defined in chapter 3) on your tax return. 1080ez Qualified education expenses are defined under What Expenses Qualify . 1080ez Eligible students are defined later under Who Is an Eligible Student . 1080ez Who Cannot Claim the Deduction You cannot claim the tuition and fees deduction if any of the following apply. 1080ez Your filing status is married filing separately. 1080ez Another person can claim an exemption for you as a dependent on his or her tax return. 1080ez You cannot take the deduction even if the other person does not actually claim that exemption. 1080ez Your modified adjusted gross income (MAGI) is more than $80,000 ($160,000 if filing a joint return). 1080ez 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. 1080ez More information on nonresident aliens can be found in Publication 519, U. 1080ez S. 1080ez Tax Guide for Aliens. 1080ez 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. 1080ez However, a state tax credit will not disqualify you from claiming a tuition and fees deduction. 1080ez Table 19-2. 1080ez Tuition and Fees Deduction at a Glance Do not rely on this table alone. 1080ez Refer to the text for more details. 1080ez Question   Answer What is the maximum benefit?   You can reduce your income subject to tax by up to $4,000. 1080ez Where is the deduction taken?   As an adjustment to income on Form 1040, line 34, or Form 1040A, line 19. 1080ez 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. 1080ez 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. 1080ez 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. 1080ez 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. 1080ez Payments with borrowed funds. 1080ez   You can claim a tuition and fees deduction for qualified education expenses paid with the proceeds of a loan. 1080ez 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. 1080ez Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. 1080ez Student withdraws from class(es). 1080ez   You can claim a tuition and fees deduction for qualified education expenses not refunded when a student withdraws. 1080ez 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. 1080ez Eligible educational institution. 1080ez   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. 1080ez S. 1080ez Department of Education. 1080ez It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. 1080ez The educational institution should be able to tell you if it is an eligible educational institution. 1080ez   Certain educational institutions located outside the United States also participate in the U. 1080ez S. 1080ez Department of Education's Federal Student Aid (FSA) programs. 1080ez Academic period. 1080ez    An academic period is any quarter, semester, trimester, or any other period of study as reasonably determined by an eligible educational institution. 1080ez If an eligible educational institution uses credit hours and does not have academic terms, each payment period may be treated as an academic period. 1080ez Related expenses. 1080ez   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. 1080ez Prepaid expenses. 1080ez   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. 1080ez See Academic period, earlier. 1080ez 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. 1080ez    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. 1080ez No Double Benefit Allowed You cannot do any of the following. 1080ez Deduct qualified education expenses you deduct under any other provision of the law, for example, as a business expense. 1080ez 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. 1080ez 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). 1080ez 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. 1080ez See Figuring the Taxable Portion of a Distribution in chapter 7 (Coverdell ESA) and chapter 8 (QTP) of Publication 970. 1080ez Deduct qualified education expenses that have been paid with tax-free interest on U. 1080ez S. 1080ez savings bonds (Form 8815). 1080ez See Figuring the Tax-Free Amount in chapter 10 of Publication 970. 1080ez Deduct qualified education expenses that have been paid with tax-free educational assistance such as a scholarship, grant, or employer-provided educational assistance. 1080ez See Adjustments to qualified education expenses, later. 1080ez Adjustments to qualified education expenses. 1080ez   For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. 1080ez The result is the amount of adjusted qualified education expenses for each student. 1080ez Tax-free educational assistance. 1080ez   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. 1080ez See Academic period, earlier. 1080ez   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. 1080ez Generally, any scholarship or fellowship you receive is treated as tax-free educational assistance. 1080ez 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. 1080ez 970, chapter 1. 1080ez 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. 1080ez 970, chapter 1. 1080ez 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. 1080ez For details, see Adjustments to Qualified Education Expenses in chapter 6 of Pub. 1080ez 970. 1080ez Some tax-free educational assistance received in 2013 may be treated as a refund of qualified education expenses paid in 2013. 1080ez 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). 1080ez 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. 1080ez 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. 1080ez Refunds. 1080ez   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. 1080ez See chapter 6 of Pub. 1080ez 970 for more information. 1080ez Some tax-free educational assistance received after 2013 may be treated as a refund. 1080ez See Tax-free educational assistance, earlier. 1080ez Refunds received in 2013. 1080ez    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. 1080ez Refunds received after 2013 but before your income tax return is filed. 1080ez   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. 1080ez Refunds received after 2013 and after your income tax return is filed. 1080ez   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. 1080ez See chapter 6 of Pub. 1080ez 970 for more information. 1080ez Coordination with Coverdell education savings accounts and qualified tuition programs. 1080ez    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). 1080ez 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. 1080ez Amounts that do not reduce qualified education expenses. 1080ez   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. 1080ez   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. 1080ez 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. 1080ez The use of the money is not restricted. 1080ez 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. 1080ez This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. 1080ez Sports, games, hobbies, and noncredit courses. 1080ez   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. 1080ez However, if the course of instruction or other education is part of the student's degree program, these expenses can qualify. 1080ez Comprehensive or bundled fees. 1080ez   Some eligible educational institutions combine all of their fees for an academic period into one amount. 1080ez 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. 1080ez 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. 1080ez See How Do You Figure the Deduction , later, for more information about Form 1098-T. 1080ez 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). 1080ez 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. 1080ez Table 19-3 summarizes who can claim the deduction. 1080ez 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. 1080ez For details on figuring your MAGI, see chapter 6 of Publication 970. 1080ez How Do You Figure the Deduction Figure the deduction using Form 8917. 1080ez To help you figure your tuition and fees deduction, you should receive Form 1098-T, Tuition Statement. 1080ez 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. 1080ez To claim the deduction, enter the allowable amount on Form 1040, line 34, or Form 1040A, line 19, and attach your completed Form 8917. 1080ez Table 19-3. 1080ez Who Can Claim a Dependent's Expenses Do not rely on this table alone. 1080ez See Who Can Claim a Dependent's Expenses in chapter 6 of Publication 970. 1080ez IF your dependent is an eligible student and you. 1080ez . 1080ez . 1080ez AND. 1080ez . 1080ez . 1080ez THEN. 1080ez . 1080ez . 1080ez 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. 1080ez Your dependent cannot take a deduction. 1080ez claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. 1080ez do not claim an exemption for your dependent you paid all qualified education expenses no one is allowed to take a deduction. 1080ez do not claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. 1080ez 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. 1080ez If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. 1080ez However, neither spouse can deduct more than $250 of his or her qualified expenses on Form 1040, line 23, or Form 1040A, line 16. 1080ez You may be able to deduct expenses that are more than the $250 (or $500) limit on Schedule A (Form 1040), line 21. 1080ez Eligible educator. 1080ez   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. 1080ez Qualified expenses. 1080ez   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. 1080ez An ordinary expense is one that is common and accepted in your educational field. 1080ez A necessary expense is one that is helpful and appropriate for your profession as an educator. 1080ez An expense does not have to be required to be considered necessary. 1080ez   Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. 1080ez   You must reduce your qualified expenses by the following amounts. 1080ez Excludable U. 1080ez S. 1080ez series EE and I savings bond interest from Form 8815. 1080ez See Figuring the Tax-Free Amount in chapter 10 of Publication 970. 1080ez Nontaxable qualified tuition program earnings or distributions. 1080ez See Figuring the Taxable Portion of a Distribution in chapter 8 of Publication 970. 1080ez Nontaxable distribution of earnings from a Coverdell education savings account. 1080ez See Figuring the Taxable Portion of a Distribution in chapter 7 of Publication 970. 1080ez Any reimbursements you received for these expenses that were not reported to you in box 1 of your Form W-2. 1080ez Prev  Up  Next   Home   More Online Publications