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Amend My Taxes

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Amend My Taxes

Amend my taxes Index Symbols 401(k) Plan Elective Deferrals, Elective Deferrals (401(k) Plans) Safe harbor, Safe harbor 401(k) plan. Amend my taxes A Annual additions, Annual additions. Amend my taxes Annual benefits, Annual benefits. Amend my taxes Assistance (see Tax help) Automatic Enrollment, Automatic Enrollment B Business, definition, Business. Amend my taxes C Common-law employee, Common-law employee. Amend my taxes Compensation, Compensation. Amend my taxes Contribution Defined, Contribution. Amend my taxes Limits Qualified plans, Limits on Contributions and Benefits SEP-IRAs, Contribution Limits SIMPLE IRA plan, Contribution Limits D Deduction Defined, SIMPLE plans. Amend my taxes , Deduction. Amend my taxes Deduction worksheet for self-employed, Figuring your deduction. Amend my taxes Defined benefit plan Deduction limits, Defined benefit plans. Amend my taxes Limits on contributions, Defined benefit plan. Amend my taxes Defined contribution plan Automatic Enrollment, Automatic Enrollment Deduction limits, Defined contribution plans. Amend my taxes Eligible automatic contribution arrangement, Eligible automatic contribution arrangement. Amend my taxes Forfeitures, Forfeiture. Amend my taxes Limits on contributions, Defined contribution plan. Amend my taxes Money purchase pension plan, Money purchase pension plan. Amend my taxes Profit-sharing plan, Profit-sharing plan. Amend my taxes Qualified automatic contribution arrangement, Qualified automatic contribution arrangement. Amend my taxes Definitions you need to know, Definitions You Need To Know Disqualified person, Prohibited Transactions Distributions (withdrawals), Distributions (Withdrawals) E EACA, Eligible automatic contribution arrangement. Amend my taxes Earned income, Earned income. Amend my taxes Eligible automatic contribution arrangement, Eligible automatic contribution arrangement. Amend my taxes Employees Eligible, Eligible employee. Amend my taxes Excludable, Excludable employees. Amend my taxes Highly compensated, Highly compensated employee. Amend my taxes Leased, Leased employee. Amend my taxes Employer Defined, Employer. Amend my taxes Excess Deferrals, Treatment of Excess Deferrals Excise tax, Excise Tax on Reversion of Plan Assets Nondeductible (excess) contributions, Excise Tax for Nondeductible (Excess) Contributions Reduced benefit accrual, Notification of Significant Benefit Accrual Reduction SEP excess contributions, Excise tax. Amend my taxes Excludable employees, Excludable employees. Amend my taxes F Form 1040, Where To Deduct Contributions, Reporting the tax. Amend my taxes 1099-R, Reporting corrective distributions on Form 1099-R. Amend my taxes 5304–SIMPLE, How To Set Up a SIMPLE IRA Plan 5305–S, Setting up a SIMPLE IRA. Amend my taxes 5305–SA, Setting up a SIMPLE IRA. Amend my taxes 5305–SEP, Formal written agreement. Amend my taxes 5305–SIMPLE, How To Set Up a SIMPLE IRA Plan 5310, Form 5310. Amend my taxes 5329, Reporting the tax. Amend my taxes 5330, Reporting the tax. Amend my taxes , Tax on excess contributions of highly compensated employees. Amend my taxes , Excise Tax on Reversion of Plan Assets, Payment of the 15% tax. Amend my taxes 5500, Form 5500. Amend my taxes , Electronic filing of Forms 5500 and 5500-SF. Amend my taxes 5500-EZ, Form 5500-EZ. Amend my taxes Form W-2, Reporting on Form W-2. Amend my taxes Schedule K (Form 1065), Where To Deduct Contributions Free tax services, Free help with your return. Amend my taxes H Highly compensated employee, Highly compensated employee. Amend my taxes K Keogh plans (see Qualified plans) L Leased employee, Leased employee. Amend my taxes N Net earnings from self-employment, Net earnings from self-employment. Amend my taxes Notification requirements, Notification Requirement P Participant, definition, Participant. Amend my taxes Participation, Participation. Amend my taxes Partner, definition, Partner. Amend my taxes Publications (see Tax help) Q QACA, Qualified automatic contribution arrangement. Amend my taxes Qualified automatic contribution arrangement, Qualified automatic contribution arrangement. Amend my taxes Qualified Plan, definition, Qualified plan. Amend my taxes Qualified plans, Limits on Contributions and Benefits Assignment of benefits, Benefits must not be assigned or alienated. Amend my taxes Benefits starting date, Benefit payment must begin when required. Amend my taxes Contributions, Contributions, Employer Contributions, Limits on Contributions and Benefits, When Contributions Are Considered Made, Where To Deduct Contributions Deduction limits, Deduction Limits, Defined contribution plans. Amend my taxes , Defined benefit plans. Amend my taxes , Deduction Limit for Self-Employed Individuals, Carryover of Excess Contributions, Excise Tax for Nondeductible (Excess) Contributions Deduction Worksheet for Self-Employed, Table and Worksheets for the Self-Employed Deductions, Employer Deduction Deferrals, Treatment of contributions. Amend my taxes , Reporting on Form W-2. Amend my taxes Defined benefit plan, Defined Benefit Plan Defined contribution plan, Defined Contribution Plan Distributions, Distributions Minimum, Required Distributions Required beginning date, Required beginning date. Amend my taxes Rollover, Rollover. Amend my taxes Tax on excess benefits, Tax on Excess Benefits Tax on premature, Tax on Early Distributions Tax treatment, Tax Treatment of Distributions Elective Deferrals, Elective Deferrals (401(k) Plans) Limits, Limit on Elective Deferrals Employee nondeductible contributions, Employee Contributions Excess Deferrals, Treatment of Excess Deferrals Investing plan assets, Investing Plan Assets Kinds of plans, Kinds of Plans Leased employees, Leased employee. Amend my taxes Minimum requirements Coverage, Minimum coverage requirement must be met. Amend my taxes Funding, Minimum Funding Requirement Vesting, Minimum vesting standard must be met. Amend my taxes Prohibited transactions, Prohibited Transactions Qualification rules, Qualification Rules Rate Table for Self-Employed, Table and Worksheets for the Self-Employed Rate Worksheet for Self-Employed, Table and Worksheets for the Self-Employed Reporting requirements, Reporting Requirements Setting up, Setting Up a Qualified Plan Qualified Plans Survivor benefits, Survivor benefits. Amend my taxes Qualified Roth Contribution Program, Qualified Roth Contribution Program R Rate Table for Self-Employed, Rate table for self-employed. Amend my taxes Rate Worksheet for Self-Employed, Rate worksheet for self-employed. Amend my taxes Required distributions, Required Distributions Rollovers, Rollover. Amend my taxes S Safe harbor 401(k) plan, Safe harbor 401(k) plan. Amend my taxes Salary reduction arrangement, Deferral percentage. Amend my taxes , Limit on Elective Deferrals Salary Reduction Simplified Employee Pension(SARSEP), Salary Reduction Simplified Employee Pensions (SARSEPs) SARSEP ADP test, SARSEP ADP test. Amend my taxes Section 402(f) notice, Section 402(f) Notice. Amend my taxes Self-employed individual, Self-employed individual. Amend my taxes SEP plans Deduction Worksheet for Self-Employed, Table and Worksheets for the Self-Employed Rate Table for Self-Employed, Table and Worksheets for the Self-Employed Rate Worksheet for Self-Employed, Table and Worksheets for the Self-Employed Reporting and Disclosure, Reporting and Disclosure Requirements SEP-IRAs Contributions, Contributions for yourself. Amend my taxes Deductible contributions, Deducting Contributions, Excise tax. Amend my taxes Carryover of excess contributions, Carryover of Excess SEP Contributions Deduction limits, Deduction Limit for Contributions for Participants Limits for self-employed, Deduction Limit for Self-Employed Individuals When to deduct, When To Deduct Contributions Where to deduct, Where To Deduct Contributions Distributions (withdrawals), Distributions (Withdrawals) Eligible employee, Eligible employee. Amend my taxes Excludable employees, Excludable employees. Amend my taxes SIMPLE IRA plan Compensation, Compensation. Amend my taxes Contributions, Contribution Limits Deductions, Nonelective contributions. Amend my taxes Distributions(withdrawals), Distributions (Withdrawals) Employee election period, Election period. Amend my taxes Employer matching contributions, Employer matching contributions. Amend my taxes Excludable employees, Excludable employees. Amend my taxes Notification requirements, Notification Requirement When to deduct contributions, When To Deduct Contributions SIMPLE plans, Who Can Set Up a SIMPLE IRA Plan?, Reporting on Form W-2. Amend my taxes SIMPLE 401(k), SIMPLE 401(k) Plan SIMPLE IRA plan, SIMPLE IRA Plan Simplified employee pension (SEP), Salary Reduction Simplified Employee Pensions (SARSEPs) Salary reduction arrangement Compensation of self-employed individuals, Compensation of self-employed individuals. Amend my taxes Employee compensation, Employee compensation. Amend my taxes Who can have a SARSEP, Who can have a SARSEP? SEP-IRA contributions, How Much Can I Contribute? Setting up a SEP, Setting Up a SEP Sixty-day employee election period, Election period. Amend my taxes Sole proprietor, definition, Sole proprietor. Amend my taxes T Tax help, How To Get Tax Help U User fee, User fee. Amend my taxes W Worksheets Deduction Worksheet for Self-Employed, Table and Worksheets for the Self-Employed Rate Worksheet for Self-Employed, Table and Worksheets for the Self-Employed Prev  Up     Home   More Online Publications
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U.S. Citizens and Resident Aliens Abroad

If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.

When to File

If you are a U.S. citizen or resident alien residing overseas, or are in the military on duty outside the U.S., on the regular due date of your return, you are allowed an automatic 2-month extension to file your return and pay any amount due without requesting an extension. For a calendar year return, the automatic 2-month extension is to June 15.

If you are unable to file your return by the automatic 2-month extension date, you can request an additional extension to October 15 by filing Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, before the automatic 2-month extension date. However, any tax due payments made after June 15 will be subject to both interest charges and failure to pay penalties.

Where to File

If you are a U.S. citizen or resident alien (Green Card Holder) and you live in a foreign country, mail your U.S. tax return to:

Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
USA

Estimated tax payments should be mailed with form 1040-ES to:

Internal Revenue Service
P.O. Box 1300
Charlotte, NC 28201-1300
USA

Taxpayers with an AGI (Adjusted Gross Income) of $58,000 or less can electronically file their tax return for free using freefile. Taxpayers with an AGI greater than $58,000 can either use the Free File Fillable Forms or efile by purchasing commercial software. A limited number of companies provide software that can accommodate foreign addresses. To determine which will work best for you, view the complete Free File Software list and the services provided.

Taxpayer Identification Number

Each taxpayer who files, or is claimed as a dependent on, a U.S. tax return will need a social security number (SSN) or individual taxpayer identification number (ITIN). To obtain a SSN, use form SS-5, Application for a Social Security Card. To get form SS-5, or to find out if you are eligible for a social security card, contact a Social Security Office or visit Social Security International Operations. If you, or your spouse, are not eligible for a SSN, you can obtain an ITIN by filing form W-7 along with appropriate documentation.

Exchange Rates

You must express the amounts you report on your U.S. tax return in U.S. dollars. If you receive all or part of your income or pay some or all of your expenses in foreign currency, you must translate the foreign currency into U.S. dollars. Taxpayers generally use the yearly average exchange rate to report foreign-earned income that was received regularly throughout the year. However, if you had foreign transactions on specific days, you may also use the exchange rates for those days. Exchange rates can be found at Foreign Currency and Currency Exchange Rates. Yearly average currency exchange rates for most countries can be found at Yearly Average Currency Exchange Rates.

How to Get Tax Help

The IRS Office in Philadelphia provides international tax assistance. This office is open Monday through Friday from 6:00 a.m. to 11:00 p.m. EST and can be contacted by:

  • Phone: 1 (267) 941-1000 (not toll-free)
  • FAX:1 (267) 941-1055
  • Email: Email the IRS
    (e-mail is for general tax questions; NOT questions regarding your tax account)
  • Mail: Internal Revenue Service
    Philadelphia, Pa 19255-0725

The IRS has customer service personnel available to provide tax assistance in the following Embassies and Consulates abroad:

 

Permanent IRS Offices Outside the United States
Office Address Office Phone Numbers and Email

U.S. Consulate
Internal Revenue Service
Frankfurt
Giessener Str.
30
60435 Frankfurt am Main
Germany

Walk-in assistance by appointment only
Tuesdays 9:00 a.m.-12:30 p.m.
Call (49) (69) 7535-3811 to request an appointment.

Phone Service
Tel: [49] (69) 7535-3823
9:00 a.m.-12:30 p.m. and 1:30 p.m.-3:30 p.m.
Monday through Thursday
U.S. Embassy
Internal Revenue Service
London
24/31 Grosvenor Square
London W1A 1 AE
England
Walk-in assistance
Tuesday through Thursday
9:00 a.m. - 1:00 p.m. and 2:00 p.m. - 4:00 p.m.

Phone Service
Tel: [44] (207) 894-0477
Monday 9 a.m. to 4 p.m.
Tuesday through Thursday 9 a.m. to 12:00 noon.
Fax: [44] (207) 495-4224
U.S. Embassy
Internal Revenue Service
2 Avenue Gabriel
75382 Paris Cedex 08
France
Walk-in assistance
Monday through Friday
9:00 a.m.- 12:00 noon

Phone Service
Tel. [33] (1) 4312-2555
Monday - Friday 9:00 a.m. - 12:00 noon and 1:30 p.m. - 3:30 p.m.
Fax: +33-1-4312-2303
Email: irs.paris@irs.gov
U.S. Embassy Beijing
Internal Revenue Service
No. 55 An Jia Lou Lu
Beijing 100600
Peoples Republic of China
Walk-in assistance by appointment only.
Wednesdays 1:00 p.m. – 4:00 p.m.
Call or email to request an appointment.

Phone Service
Tel: [86] (10) 8531-3983
Fax: [86] (10) 8531-4287
Email: irs.beijing@irs.gov (for all inquiries)

 

Help with Unresolved Tax Problems

If you are experiencing a tax problem that is causing you economic harm or has not been resolved through normal channels, you can contact the Taxpayer Advocate.

References/Related Topics

Page Last Reviewed or Updated: 31-Jan-2014

The Amend My Taxes

Amend my taxes 4. Amend my taxes   Student Loan Interest Deduction Table of Contents Introduction Student Loan Interest DefinedQualified Student Loan Qualified Education Expenses Include As Interest Do Not Include As Interest When Must Interest Be Paid Can You Claim the DeductionNo Double Benefit Allowed Figuring the DeductionEffect of the Amount of Your Income on the Amount of Your Deduction Which Worksheet To Use Claiming the Deduction Introduction Generally, personal interest you pay, other than certain mortgage interest, is not deductible on your tax return. Amend my taxes 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. Amend my taxes 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. Amend my taxes This deduction can reduce the amount of your income subject to tax by up to $2,500 in 2013. Amend my taxes The student loan interest deduction is taken as an adjustment to income. Amend my taxes This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). Amend my taxes This chapter explains: What type of loan interest you can deduct, Whether you can claim the deduction, What expenses you must have paid with the student loan, Who is an eligible student, How to figure the deduction, and How to claim the deduction. Amend my taxes Table 4-1. Amend my taxes Student Loan Interest Deduction at a Glance This table summarizes the features of the student loan interest deduction. Amend my taxes Do not rely on this table alone. Amend my taxes Refer to the text for complete details. Amend my taxes Feature   Description Maximum benefit   You can reduce your income subject to tax by up to $2,500. Amend my taxes 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. Amend my taxes Student qualifications   The student must be: •you, your spouse, or your dependent, and  •enrolled at least half-time in a degree program. Amend my taxes Time limit on deduction   You can deduct interest paid during the remaining period of your student loan. Amend my taxes Limit on modified adjusted gross income (MAGI)   $155,000 if married filing a joint return; $75,000 if single, head of household, or qualifying widow(er). Amend my taxes Student Loan Interest Defined Student loan interest is interest you paid during the year on a qualified student loan. Amend my taxes It includes both required and voluntary interest payments. Amend my taxes 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 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 for an eligible student. Amend my taxes Loans from the following sources are not qualified student loans. Amend my taxes A related person. Amend my taxes A qualified employer plan. Amend my taxes Your dependent. Amend my taxes   Generally, your dependent is someone who is either a: Qualifying child, or Qualifying relative. Amend my taxes You can find more information about dependents in Publication 501. Amend my taxes Exceptions. Amend my taxes   For purposes of the student loan interest deduction, there are the following exceptions to the general rules for dependents. Amend my taxes An individual can be your dependent even if you are the dependent of another taxpayer. Amend my taxes An individual can be your dependent even if the individual files a joint return with a spouse. Amend my taxes 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). Amend my taxes Reasonable period of time. Amend my taxes   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. Amend my taxes   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. Amend my taxes The expenses relate to a specific academic period, and 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. Amend my taxes   If neither of the above situations applies, the reasonable period of time usually is determined based on all the relevant facts and circumstances. Amend my taxes Academic period. Amend my taxes   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. Amend my taxes 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. Amend my taxes Eligible student. Amend my taxes   This is a student who was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. Amend my taxes Enrolled at least half-time. Amend my taxes   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. Amend my taxes   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. Amend my taxes However, the standard may not be lower than any of those established by the U. Amend my taxes S. Amend my taxes Department of Education under the Higher Education Act of 1965. Amend my taxes Related person. Amend my taxes   You cannot deduct interest on a loan you get from a related person. Amend my taxes Related persons include: Your spouse, Your brothers and sisters, Your half brothers and half sisters, Your ancestors (parents, grandparents, etc. Amend my taxes ), Your lineal descendants (children, grandchildren, etc. Amend my taxes ), and Certain corporations, partnerships, trusts, and exempt organizations. Amend my taxes Qualified employer plan. Amend my taxes   You cannot deduct interest on a loan made under a qualified employer plan or under a contract purchased under such a plan. Amend my taxes 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. Amend my taxes They include amounts paid for the following items. Amend my taxes Tuition and fees. Amend my taxes Room and board. Amend my taxes Books, supplies, and equipment. Amend my taxes Other necessary expenses (such as transportation). Amend my taxes The cost of room and board qualifies only to the extent that it is not more than the greater of: 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 The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. Amend my taxes Eligible educational institution. Amend my taxes   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. Amend my taxes S. Amend my taxes Department of Education. Amend my taxes It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Amend my taxes   Certain educational institutions located outside the United States also participate in the U. Amend my taxes S. Amend my taxes Department of Education's Federal Student Aid (FSA) programs. Amend my taxes   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. Amend my taxes   An educational institution must meet the above criteria only during the academic period(s) for which the student loan was incurred. Amend my taxes The deductibility of interest on the loan is not affected by the institution's subsequent loss of eligibility. Amend my taxes    The educational institution should be able to tell you if it is an eligible educational institution. Amend my taxes Adjustments to Qualified Education Expenses You must reduce your qualified education expenses by the total amount paid for them with the following tax-free items. Amend my taxes Employer-provided educational assistance. Amend my taxes See chapter 11, Employer-Provided Educational Assistance . Amend my taxes Tax-free distribution of earnings from a Coverdell education savings account (ESA). Amend my taxes See Tax-Free Distributions in chapter 7, Coverdell Education Savings Account. Amend my taxes Tax-free distribution of earnings from a qualified tuition program (QTP). Amend my taxes See Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program. Amend my taxes U. Amend my taxes S. Amend my taxes savings bond interest that you exclude from income because it is used to pay qualified education expenses. Amend my taxes See chapter 10, Education Savings Bond Program . Amend my taxes The tax-free part of scholarships and fellowships. Amend my taxes See Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Amend my taxes Veterans' educational assistance. Amend my taxes See Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Amend my taxes Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Amend my taxes Include As Interest In addition to simple interest on the loan, if all other requirements are met, the items discussed below can be student loan interest. Amend my taxes Loan origination fee. Amend my taxes   In general, this is a one-time fee charged by the lender when a loan is made. Amend my taxes To be deductible as interest, a loan origination 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. Amend my taxes A loan origination fee treated as interest accrues over the term of the loan. Amend my taxes   Loan origination fees were not required to be reported on Form 1098-E, Student Loan Interest Statement, for loans made before September 1, 2004. Amend my taxes If loan origination fees are not included in the amount reported on your Form 1098-E, you can use any reasonable method to allocate the loan origination fees over the term of the loan. Amend my taxes The method shown in the example below allocates equal portions of the loan origination fee to each payment required under the terms of the loan. Amend my taxes A method that results in the double deduction of the same portion of a loan origination fee would not be reasonable. Amend my taxes Example. Amend my taxes In August 2004, Bill took out a student loan for $16,000 to pay the tuition for his senior year of college. Amend my taxes The lender charged a 3% loan origination fee ($480) that was withheld from the funds Bill received. Amend my taxes Bill began making payments on his student loan in 2013. Amend my taxes Because the loan origination fee was not included in his 2013 Form 1098-E, Bill can use any reasonable method to allocate that fee over the term of the loan. Amend my taxes Bill's loan is payable in 120 equal monthly payments. Amend my taxes He allocates the $480 fee equally over the total number of payments ($480 ÷ 120 months = $4 per month). Amend my taxes Bill made 7 payments in 2013, so he paid $28 ($4 × 7) of interest attributable to the loan origination fee. Amend my taxes To determine his student loan interest deduction, he will add the $28 to the amount of other interest reported to him on Form 1098-E. Amend my taxes Capitalized interest. Amend my taxes   This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. Amend my taxes Capitalized interest is treated as interest for tax purposes and is deductible as payments of principal are made on the loan. Amend my taxes No deduction for capitalized interest is allowed in a year in which no loan payments were made. Amend my taxes Interest on revolving lines of credit. Amend my taxes   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. Amend my taxes See Qualified Education Expenses , earlier. Amend my taxes Interest on refinanced student loans. Amend my taxes   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. Amend my taxes    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. Amend my taxes Voluntary interest payments. Amend my taxes   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. Amend my taxes Example. Amend my taxes The payments on Roger's student loan were scheduled to begin in June 2012, 6 months after he graduated from college. Amend my taxes He began making payments as required. Amend my taxes In September 2013, Roger enrolled in graduate school on a full-time basis. Amend my taxes He applied for and was granted deferment of his loan payments while in graduate school. Amend my taxes Wanting to pay down his student loan as much as possible, he made loan payments in October and November 2013. Amend my taxes Even though these were voluntary (not required) payments, Roger can deduct the interest paid in October and November. Amend my taxes Allocating Payments Between Interest and Principal The allocation of payments between interest and principal for tax purposes might not be the same as the allocation shown on the Form 1098-E or other statement you receive from the lender or loan servicer. Amend my taxes To make the allocation for tax purposes, a payment generally applies first to stated interest that remains unpaid as of the date the payment is due, second to any loan origination fees allocable to the payment, third to any capitalized interest that remains unpaid as of the date the payment is due, and fourth to the outstanding principal. Amend my taxes Example. Amend my taxes In August 2012, Peg took out a $10,000 student loan to pay the tuition for her senior year of college. Amend my taxes The lender charged a 3% loan origination fee ($300) that was withheld from the funds Peg received. Amend my taxes The interest (5% simple) on this loan accrued while she completed her senior year and for 6 months after she graduated. Amend my taxes At the end of that period, the lender determined the amount to be repaid by capitalizing all accrued but unpaid interest ($625 interest accrued from August 2012 through October 2013) and adding it to the outstanding principal balance of the loan. Amend my taxes The loan is payable over 60 months, with a payment of $200. Amend my taxes 51 due on the first of each month, beginning November 2013. Amend my taxes Peg did not receive a Form 1098-E for 2013 from her lender because the amount of interest she paid did not require the lender to issue an information return. Amend my taxes However, she did receive an account statement from the lender that showed the following 2013 payments on her outstanding loan of $10,625 ($10,000 principal + $625 accrued but unpaid interest). Amend my taxes Payment Date   Payment   Stated Interest   Principal November 2013   $200. Amend my taxes 51   $44. Amend my taxes 27   $156. Amend my taxes 24 December 2013   $200. Amend my taxes 51   $43. Amend my taxes 62   $156. Amend my taxes 89 Totals   $401. Amend my taxes 02   $87. Amend my taxes 89   $313. Amend my taxes 13 To determine the amount of interest that could be deducted on the loan for 2013, Peg starts with the total amount of stated interest she paid, $87. Amend my taxes 89. Amend my taxes Next, she allocates the loan origination fee over the term of the loan ($300 ÷ 60 months = $5 per month). Amend my taxes A total of $10 ($5 of each of the two principal payments) should be treated as interest for tax purposes. Amend my taxes Peg then applies the unpaid capitalized interest ($625) to the two principal payments in the order in which they were made, and determines that the remaining amount of principal of both payments is treated as interest for tax purposes. Amend my taxes Assuming that Peg qualifies to take the student loan interest deduction, she can deduct $401. Amend my taxes 02 ($87. Amend my taxes 89 + $10 + $303. Amend my taxes 13). Amend my taxes For 2014, Peg will continue to allocate $5 of the loan origination fee to the principal portion of each monthly payment she makes and treat that amount as interest for tax purposes. Amend my taxes She also will apply the remaining amount of capitalized interest ($625 − $303. Amend my taxes 13 = $321. Amend my taxes 87) to the principal payments in the order in which they are made until the balance is zero, and treat those amounts as interest for tax purposes. Amend my taxes Do Not Include As Interest You cannot claim a student loan interest deduction for any of the following items. Amend my taxes Interest you paid on a loan if, under the terms of the loan, you are not legally obligated to make interest payments. Amend my taxes Loan origination fees that are payments for property or services provided by the lender, such as commitment fees or processing costs. Amend my taxes 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. Amend my taxes For more information, see Student Loan Repayment Assistance in chapter 5, Student Loan Cancellations and Repayment Assistance. Amend my taxes When Must Interest Be Paid You can deduct all interest you paid during the year on your student loan, including voluntary payments, until the loan is paid off. Amend my taxes Can You Claim the Deduction Generally, you can claim the deduction if all of the following requirements are met. Amend my taxes Your filing status is any filing status except married filing separately. Amend my taxes No one else is claiming an exemption for you on his or her tax return. Amend my taxes You are legally obligated to pay interest on a qualified student loan. Amend my taxes You paid interest on a qualified student loan. Amend my taxes Claiming an exemption for you. Amend my taxes   Another taxpayer is claiming an exemption for you if he or she lists your name and other required information on his or her Form 1040 (or Form 1040A), line 6c, or Form 1040NR, line 7c. Amend my taxes Example 1. Amend my taxes During 2013, Josh paid $600 interest on his qualified student loan. Amend my taxes Only he is legally obligated to make the payments. Amend my taxes No one claimed an exemption for Josh for 2013. Amend my taxes Assuming all other requirements are met, Josh can deduct the $600 of interest he paid on his 2013 Form 1040 or 1040A. Amend my taxes Example 2. Amend my taxes During 2013, Jo paid $1,100 interest on her qualified student loan. Amend my taxes Only she is legally obligated to make the payments. Amend my taxes Jo's parents claimed an exemption for her on their 2013 tax return. Amend my taxes In this case, neither Jo nor her parents may deduct the student loan interest Jo paid in 2013. Amend my taxes Interest paid by others. Amend my taxes   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. Amend my taxes Example 1. Amend my taxes Darla obtained a qualified student loan to attend college. Amend my taxes After Darla's graduation from college, she worked as an intern for a nonprofit organization. Amend my taxes As part of the internship program, the nonprofit organization made an interest payment on behalf of Darla. Amend my taxes This payment was treated as additional compensation and reported in box 1 of her Form W-2. Amend my taxes Assuming all other qualifications are met, Darla can deduct this payment of interest on her tax return. Amend my taxes Example 2. Amend my taxes Ethan obtained a qualified student loan to attend college. Amend my taxes After graduating from college, the first monthly payment on his loan was due in December. Amend my taxes As a gift, Ethan's mother made this payment for him. Amend my taxes No one is claiming a dependency exemption for Ethan on his or her tax return. Amend my taxes Assuming all other qualifications are met, Ethan can deduct this payment of interest on his tax return. Amend my taxes 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, as home mortgage interest). Amend my taxes Figuring the Deduction Your student loan interest deduction for 2013 is generally the smaller of: $2,500, or The interest you paid in 2013. Amend my taxes However, the amount determined above may be gradually reduced (phased out) or eliminated based on your filing status and MAGI as explained below. Amend my taxes You can use Worksheet 4-1. Amend my taxes Student Loan Interest Deduction Worksheet (at the end of this chapter) to figure both your MAGI and your deduction. Amend my taxes Form 1098-E. Amend my taxes   To help you figure your student loan interest deduction, you should receive Form 1098-E. Amend my taxes 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. Amend my taxes   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. Amend my taxes Other interest payments, such as certain loan origination fees and capitalized interest, may not appear on the form you receive. Amend my taxes However, if you pay qualifying interest that is not included on Form 1098-E, you can also deduct those amounts. Amend my taxes See Allocating Payments Between Interest and Principal , earlier. Amend my taxes    The lender may ask for a completed Form W-9S, or similar statement to obtain the borrower's name, address, and taxpayer identification number. Amend my taxes The form may also be used by the borrower to certify that the student loan was incurred solely to pay for qualified education expenses. Amend my taxes Effect of the Amount of Your Income on the Amount of Your Deduction The amount of your student loan interest deduction 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). Amend my taxes 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). Amend my taxes Modified adjusted gross income (MAGI). Amend my taxes   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return before subtracting any deduction for student loan interest. Amend my taxes However, as discussed below, there may be other modifications. Amend my taxes Table 4-2 shows how the amount of your MAGI can affect your student loan interest deduction. Amend my taxes Table 4-2. Amend my taxes Effect of MAGI on Student Loan Interest Deduction IF your filing status is. Amend my taxes . Amend my taxes . Amend my taxes AND your MAGI is. Amend my taxes . Amend my taxes . Amend my taxes THEN your student loan interest deduction is. Amend my taxes . Amend my taxes . Amend my taxes single,  head of household, or qualifying widow(er) not more than $60,000 not affected by the phaseout. Amend my taxes more than $60,000  but less than $75,000 reduced because of the phaseout. Amend my taxes $75,000 or more eliminated by the phaseout. Amend my taxes married filing joint return not more than $125,000 not affected by the phaseout. Amend my taxes more than $125,000 but less than $155,000 reduced because of the phaseout. Amend my taxes $155,000 or more eliminated by the phaseout. Amend my taxes MAGI when using Form 1040A. Amend my taxes   If you file Form 1040A, your MAGI is the AGI on line 22 of that form figured without taking into account any amount on line 18 (student loan interest deduction) and line 19 (tuition and fees deduction). Amend my taxes MAGI when using Form 1040. Amend my taxes   If you file Form 1040, your MAGI is the AGI on line 38 of that form figured without taking into account any amount on line 33 (student loan interest deduction), line 34 (tuition and fees deduction), or line 35 (domestic production activities deduction), and modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. Amend my taxes MAGI when using Form 1040NR. Amend my taxes   If you file Form 1040NR, your MAGI is the AGI on line 36 of that form figured without taking into account any amount on line 33 (student loan interest deduction) and line 34 (domestic production activities deduction). Amend my taxes MAGI when using Form 1040NR-EZ. Amend my taxes   If you file Form 1040NR-EZ, your MAGI is the AGI on line 10 of that form figured without taking into account any amount on line 9 (student loan interest deduction). Amend my taxes Phaseout. Amend my taxes   If your MAGI is within the range of incomes where the credit must be reduced, you must figure your reduced deduction. Amend my taxes To figure the phaseout, multiply your interest deduction (before the phaseout) by a fraction. Amend my taxes The numerator is your MAGI minus $60,000 ($125,000 in the case of a joint return). Amend my taxes The denominator is $15,000 ($30,000 in the case of a joint return). Amend my taxes Subtract the result from your deduction (before the phaseout) to give you the amount you can deduct. Amend my taxes Example 1. Amend my taxes During 2013 you paid $800 interest on a qualified student loan. Amend my taxes Your 2013 MAGI is $145,000 and you are filing a joint return. Amend my taxes You must reduce your deduction by $533, figured as follows. Amend my taxes   $800 × $145,000 − $125,000  $30,000 = $533   Your reduced student loan interest deduction is $267 ($800 − $533). Amend my taxes Example 2. Amend my taxes The facts are the same as in Example 1 except that you paid $2,750 interest. Amend my taxes Your maximum deduction for 2013 is $2,500. Amend my taxes You must reduce your maximum deduction by $1,667, figured as follows. Amend my taxes   $2,500 × $145,000 − $125,000  $30,000 = $1,667   In this example, your reduced student loan interest deduction is $833 ($2,500 − $1,667). Amend my taxes Which Worksheet To Use Generally, you figure the deduction using the Student Loan Interest Deduction Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR. Amend my taxes However, if you are filing Form 2555, Foreign Earned Income, Form 2555-EZ, Foreign Earned Income Exclusion, or Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa, or you are excluding income from sources within Puerto Rico, you must complete Worksheet 4-1. Amend my taxes Student Loan Interest Deduction Worksheet at the end of this chapter. Amend my taxes Claiming the Deduction The student loan interest deduction is an adjustment to income. Amend my taxes To claim the deduction, enter the allowable amount on line 33 (Form 1040), line 18 (Form 1040A), line 33 (Form 1040NR), or line 9 (Form 1040NR-EZ). Amend my taxes Worksheet 4-1. Amend my taxes Student Loan Interest Deduction Worksheet Use this worksheet instead of the worksheet in the Form 1040 instructions if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico. Amend my taxes Before using this worksheet, you must complete Form 1040, lines 7 through 32, plus any amount to be entered on the dotted line next to line 36. Amend my taxes 1. Amend my taxes Enter the total interest you paid in 2013 on qualified student loans. Amend my taxes Do not enter  more than $2,500 1. Amend my taxes   2. Amend my taxes Enter the amount from Form 1040, line 22 2. Amend my taxes       3. Amend my taxes Enter the total of the amounts from Form 1040,  lines 23 through 32 3. Amend my taxes           4. Amend my taxes Enter the total of any amounts entered on the dotted line next to Form 1040, line 36 4. Amend my taxes           5. Amend my taxes Add lines 3 and 4 5. Amend my taxes       6. Amend my taxes Subtract line 5 from line 2 6. Amend my taxes       7. Amend my taxes Enter any foreign earned income exclusion and/or housing  exclusion (Form 2555, line 45, or Form 2555-EZ, line 18) 7. Amend my taxes       8. Amend my taxes Enter any foreign housing deduction (Form 2555, line 50) 8. Amend my taxes       9. Amend my taxes Enter the amount of income from Puerto Rico you are excluding 9. Amend my taxes       10. Amend my taxes Enter the amount of income from American Samoa  you are excluding (Form 4563, line 15) 10. Amend my taxes       11. Amend my taxes Add lines 6 through 10. Amend my taxes This is your modified adjusted gross income 11. Amend my taxes   12. Amend my taxes Enter the amount shown below for your filing status 12. Amend my taxes     •Single, head of household, or qualifying widow(er)—$60,000       •Married filing jointly—$125,000     13. Amend my taxes Is the amount on line 11 more than the amount on line 12?       □ No. Amend my taxes Skip lines 13 and 14, enter -0- on line 15, and go to line 16. Amend my taxes       □ Yes. Amend my taxes Subtract line 12 from line 11 13. Amend my taxes   14. Amend my taxes Divide line 13 by $15,000 ($30,000 if married filing jointly). Amend my taxes Enter the result as a decimal  (rounded to at least three places). Amend my taxes If the result is 1. Amend my taxes 000 or more, enter 1. Amend my taxes 000 14. Amend my taxes . Amend my taxes 15. Amend my taxes Multiply line 1 by line 14 15. Amend my taxes   16. Amend my taxes Student loan interest deduction. Amend my taxes Subtract line 15 from line 1. Amend my taxes Enter the result here  and on Form 1040, line 33. Amend my taxes Do not include this amount in figuring any other  deduction on your return (such as on Schedule A, C, E, etc. Amend my taxes ) 16. Amend my taxes   Prev  Up  Next   Home   More Online Publications