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Amend Tax Form

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Amend Tax Form

Amend tax form 4. Amend tax form   Underpayment Penalty for 2013 Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: General RuleFarmers and fishermen. Amend tax form Higher income taxpayers. Amend tax form Minimum required for higher income taxpayers. Amend tax form Estate or trust payments of estimated tax. Amend tax form Lowering or eliminating the penalty. Amend tax form ExceptionsLess Than $1,000 Due No Tax Liability Last Year Figuring Your Required Annual Payment (Part I) Short Method for Figuring the Penalty (Part III) Regular Method for Figuring the Penalty (Part IV)Figuring Your Underpayment (Part IV, Section A) Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty Annualized Income Installment Method (Schedule AI) Farmers and Fishermen Waiver of PenaltyFarmers and fishermen. Amend tax form Introduction If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have underpaid your estimated tax and may have to pay a penalty. Amend tax form You may understand this chapter better if you can refer to a copy of your latest federal income tax return. Amend tax form No penalty. Amend tax form   Generally, you will not have to pay a penalty for 2013 if any of the following apply. Amend tax form The total of your withholding and timely estimated tax payments was at least as much as your 2012 tax. Amend tax form (See Special rules for certain individuals for higher income taxpayers and farmers and fishermen. Amend tax form ) The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. Amend tax form Your total tax for 2013 (defined later) minus your withholding is less than $1,000. Amend tax form You did not have a tax liability for 2012. Amend tax form You did not have any withholding taxes and your current year tax (less any household employment taxes) is less than $1,000. Amend tax form IRS can figure the penalty for you. Amend tax form   If you think you owe the penalty, but you do not want to figure it yourself when you file your tax return, you may not have to. Amend tax form Generally, the IRS will figure the penalty for you and send you a bill. Amend tax form   You only need to figure your penalty in the following three situations. Amend tax form You are requesting a waiver of part, but not all, of the penalty. Amend tax form You are using the annualized income installment method to figure the penalty. Amend tax form You are treating the federal income tax withheld from your income as paid on the dates actually withheld. Amend tax form However, if these situations do not apply to you, and you think you can lower or eliminate your penalty, complete Form 2210 or Form 2210-F and attach it to your return. Amend tax form See Form 2210 , later. Amend tax form Topics - This chapter discusses: The general rule for the underpayment penalty, Special rules for certain individuals, Exceptions to the underpayment penalty, How to figure your underpayment and the amount of your penalty on Form 2210, and How to ask the IRS to waive the penalty. Amend tax form Useful Items - You may want to see: Form (and Instructions) 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen See chapter 5 for information about getting these forms. Amend tax form General Rule In general, you may owe a penalty for 2013 if the total of your withholding and timely estimated tax payments did not equal at least the smaller of: 90% of your 2013 tax, or 100% of your 2012 tax. Amend tax form (Your 2012 tax return must cover a 12-month period. Amend tax form ) Your 2013 tax, for this purpose, is defined under Total tax for 2013 , later. Amend tax form Special rules for certain individuals. Amend tax form   There are special rules for farmers and fishermen and certain higher income taxpayers. Amend tax form Farmers and fishermen. Amend tax form   If at least two-thirds of your gross income for 2012 or 2013 is from farming or fishing, substitute  662/3% for 90% in (1) above. Amend tax form   See Farmers and Fishermen , later. Amend tax form Higher income taxpayers. Amend tax form   If your AGI for 2012 was more than $150,000 ($75,000 if your 2013 filing status is married filing a separate return), substitute 110% for 100% in (2) under General Rule . Amend tax form This rule does not apply to farmers or fishermen. Amend tax form   For 2012, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. Amend tax form Penalty figured separately for each period. Amend tax form   Because the penalty is figured separately for each payment period, you may owe a penalty for an earlier payment period even if you later paid enough to make up the underpayment. Amend tax form This is true even if you are due a refund when you file your income tax return. Amend tax form Example. Amend tax form You did not make estimated tax payments for 2013 because you thought you had enough tax withheld from your wages. Amend tax form Early in January 2014, you made an estimate of your total 2013 tax. Amend tax form Then you realized that your withholding was $2,000 less than the amount needed to avoid a penalty for underpayment of estimated tax. Amend tax form On January 10, you made an estimated tax payment of $3,000, which is the difference between your withholding and your estimate of your total tax. Amend tax form Your final return shows your total tax to be $50 less than your estimate, so you are due a refund. Amend tax form You do not owe a penalty for your payment due January 15, 2014. Amend tax form However, you may owe a penalty through January 10, 2014, the day you made the $3,000 payment, for your underpayments for the earlier payment periods. Amend tax form Minimum required each period. Amend tax form   You will owe a penalty for any 2013 payment period for which your estimated tax payment plus your withholding for the period and overpayments applied from previous periods was less than the smaller of: 22. Amend tax form 5% of your 2013 tax, or 25% of your 2012 tax. Amend tax form (Your 2012 tax return must cover a 12-month period. Amend tax form ) Minimum required for higher income taxpayers. Amend tax form   If you are subject to the rule for higher income taxpayers, discussed above, substitute 27. Amend tax form 5% for 25% in (2) under General Rule . Amend tax form When penalty is charged. Amend tax form   If you miss a payment or you paid less than the minimum required in a period, you may be charged an underpayment penalty from the date the amount was due to the date the payment is made. Amend tax form If a payment is mailed, the date of the U. Amend tax form S. Amend tax form postmark is considered the date of payment. Amend tax form   If a payment is made electronically, the date the payment is shown on your payment account (checking, savings, etc. Amend tax form ) is considered to be the date of payment. Amend tax form Estate or trust payments of estimated tax. Amend tax form   If you have estimated taxes credited to you from an estate or trust (Schedule K-1 (Form 1041)), treat the payment as made by you on January 15, 2014. Amend tax form Amended returns. Amend tax form    If you file an amended return by the due date of your original return, use the tax shown on your amended return to figure your required estimated tax payments. Amend tax form If you file an amended return after the due date of the original return, use the tax shown on the original return. Amend tax form   However, if you and your spouse file a joint return after the due date to replace separate returns you originally filed by the due date, use the tax shown on the joint return to figure your required estimated tax payments. Amend tax form This rule applies only if both original separate returns were filed on time. Amend tax form 2012 separate returns and 2013 joint return. Amend tax form    If you file a joint return with your spouse for 2013, but you filed separate returns for 2012, your 2012 tax is the total of the tax shown on your separate returns. Amend tax form You filed a separate return if you filed as single, head of household, or married filing separately. Amend tax form 2012 joint return and 2013 separate returns. Amend tax form    If you file a separate return for 2013, but you filed a joint return with your spouse for 2012, your 2012 tax is your share of the tax on the joint return. Amend tax form You are filing a separate return if you file as single, head of household, or married filing separately. Amend tax form   To figure your share of the taxes on a joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2012 using the same filing status as for 2013. Amend tax form Then multiply the tax on the joint return by the following fraction. Amend tax form   The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. Amend tax form Lisa and Paul filed a joint return for 2012 showing taxable income of $49,000 and a tax of $6,484. Amend tax form Of the $49,000 taxable income, $41,000 was Lisa's and the rest was Paul's. Amend tax form For 2013, they file married filing separately. Amend tax form Lisa figures her share of the tax on the 2012 joint return as follows. Amend tax form 2012 tax on $41,000 based on a separate return $ 6,286 2012 tax on $8,000 based on a  separate return 803 Total $ 7,089 Lisa's percentage of total tax  ($6,286 ÷ $ 7,089) 88. Amend tax form 67% Lisa's part of tax on joint return ($6,484 × 88. Amend tax form 67%) $ 5,749 Form 2210. Amend tax form   In most cases, you do not need to file Form 2210. Amend tax form The IRS will figure the penalty for you and send you a bill. Amend tax form If you want us to figure the penalty for you, leave the penalty line on your return blank. Amend tax form Do not file Form 2210. Amend tax form   To determine if you should file Form 2210, see Part II of Form 2210. Amend tax form If you decide to figure your penalty, complete Part I, Part II, and either Part III or Part IV of the form and the Penalty Worksheet in the Instructions for Form 2210. Amend tax form If you use Form 2210, you cannot file Form 1040EZ. Amend tax form   On Form 1040, enter the amount of your penalty on line 77. Amend tax form If you owe tax on line 76, add the penalty to your tax due and show your total payment on line 76. Amend tax form If you are due a refund, subtract the penalty from the overpayment and enter the result on line 73. Amend tax form   On Form 1040A, enter the amount of your penalty on line 46. Amend tax form If you owe tax on line 45, add the penalty to your tax due and show your total payment on line 45. Amend tax form If you are due a refund, subtract the penalty from the overpayment and enter the result on line 42. Amend tax form Lowering or eliminating the penalty. Amend tax form    You may be able to lower or eliminate your penalty if you file Form 2210. Amend tax form You must file Form 2210 with your return if any of the following applies. Amend tax form You request a waiver. Amend tax form See Waiver of Penalty , later. Amend tax form You use the annualized income installment method. Amend tax form See the explanation of this method under Annualized Income Installment Method (Schedule AI) . Amend tax form You use your actual withholding for each payment period for estimated tax purposes. Amend tax form See Actual withholding method under Figuring Your Underpayment (Part IV, Section A). Amend tax form You base any of your required installments on the tax shown on your 2012 return and you filed or are filing a joint return for either 2012 or 2013, but not for both years. Amend tax form Exceptions Generally, you do not have to pay an underpayment penalty if either: Your total tax is less than $1,000, or You had no tax liability last year. Amend tax form Less Than $1,000 Due You do not owe a penalty if the total tax shown on your return minus the amount you paid through withholding (including excess social security and tier 1 railroad retirement (RRTA) tax withholding) is less than $1,000. Amend tax form Total tax for 2013. Amend tax form   For 2013, your total tax on Form 1040 is the amount on line 61 reduced by the following. Amend tax form    Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). Amend tax form Any tax included on line 58 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement plans. Amend tax form The following write-ins on line 60: Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance, Tax on excess golden parachute payments, Excise tax on insider stock compensation from an expatriated corporation, Look-back interest due under section 167(g), Look-back interest due under section 460(b), Recapture of federal mortgage subsidy, and Additional tax on advance payments of health coverage tax credit when not eligible. Amend tax form Any refundable credit amounts listed on lines 64a, 65, 66, 70, and any credit from Form 8885 included on line 71. Amend tax form   If you filed Form 1040A, your 2013 total tax is the amount on line 35 reduced by any refundable credits on lines 38a, 39, and 40. Amend tax form   If you filed Form 1040EZ, your 2013 total tax is the amount on line 10 reduced by the amount on line 8a. Amend tax form Note. Amend tax form When figuring the amount on line 60, include household employment taxes only if you had federal income tax withheld from your income or you would owe the penalty even if you did not include those taxes. Amend tax form Paid through withholding. Amend tax form    For 2013, the amount you paid through withholding on Form 1040 is the amount on line 62 plus any excess social security or tier 1 RRTA tax withholding on line 69. Amend tax form Add to that any write-in amount on line 72 identified as “Form 8689. Amend tax form ” On Form 1040A, the amount you paid through withholding is the amount on line 36 plus any excess social security or tier 1 RRTA tax withholding included on line 41. Amend tax form On Form 1040EZ, it is the amount on line 7. Amend tax form No Tax Liability Last Year You do not owe a penalty if you had no tax liability last year and you were a U. Amend tax form S. Amend tax form citizen or resident for the whole year. Amend tax form For this rule to apply, your tax year must have included all 12 months of the year. Amend tax form You had no tax liability for 2012 if your total tax was zero or you were not required to file an income tax return. Amend tax form Example. Amend tax form Ray, who is single and 22 years old, was unemployed for a few months during 2012. Amend tax form He earned $6,700 in wages before he was laid off, and he received $1,400 in unemployment compensation afterwards. Amend tax form He had no other income. Amend tax form Even though he had gross income of $8,100, he did not have to pay income tax because his gross income was less than the filing requirement for a single person under age 65 ($9,750 for 2012). Amend tax form He filed a return only to have his withheld income tax refunded to him. Amend tax form In 2013, Ray began regular work as an independent contractor. Amend tax form Ray made no estimated tax payments in 2013. Amend tax form Even though he did owe tax at the end of the year, Ray does not owe the underpayment penalty for 2013 because he had no tax liability in 2012. Amend tax form Total tax for 2012. Amend tax form   For 2012, your total tax on Form 1040 is the amount on line 61 reduced by the following. Amend tax form    Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). Amend tax form Any tax included on line 58 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement plans. Amend tax form The following write-ins on line 60: Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance, Tax on excess golden parachute payments, Excise tax on insider stock compensation from an expatriated corporation, Look-back interest due under section 167(g), Look-back interest due under section 460(b), Recapture of federal mortgage subsidy, and Additional tax on advance payments of health coverage tax credit when not eligible. Amend tax form Any refundable credit amounts listed on lines 64a, 65, 66, 70, and credits from Forms 8801 (line 27 only), and 8885 included on line 71. Amend tax form   If you filed Form 1040A, your 2012 total tax is the amount on line 35 reduced by any refundable credits on lines 38a, 39, and 40. Amend tax form   If you filed Form 1040EZ, your 2012 total tax is the amount on line 11 reduced by the amount on line 8a. Amend tax form Figuring Your Required Annual Payment (Part I) Figure your required annual payment in Part I of Form 2210, following the line-by-line instructions. Amend tax form If you rounded the entries on your tax return to whole dollars, you can round on Form 2210. Amend tax form Example. Amend tax form The tax on Lori Lane's 2012 return was $12,400. Amend tax form Her AGI was not more than $150,000 for either 2012 or 2013. Amend tax form The tax on her 2013 return (Form 1040, line 55) is $13,044. Amend tax form Line 56 (self-employment tax) is $8,902. Amend tax form Her 2013 total tax is $21,946. Amend tax form For 2013, Lori had $1,600 income tax withheld and made four equal estimated tax payments ($1,000 each). Amend tax form 90% of her 2013 tax is $19,751. Amend tax form Because she paid less than her 2012 tax ($12,400) and less than 90% of her 2013 tax ($19,751), and does not meet an exception, Lori knows that she owes a penalty for underpayment of estimated tax. Amend tax form The IRS will figure the penalty for Lori, but she decides to figure it herself on Form 2210 and pay it with her taxes when she files her tax return. Amend tax form Lori's required annual payment is $12,400 (100% of 2012 tax) because that is smaller than 90% of her 2013 tax. Amend tax form Different 2012 filing status. Amend tax form    If you file a separate return for 2013, but you filed a joint return with your spouse for 2012, see 2012 joint return and 2013 separate returns , earlier, to figure the amount to enter as your 2012 tax on line 8 of Form 2210. Amend tax form Short Method for Figuring the Penalty (Part III) You may be able to use the short method in Part III of Form 2210 to figure your penalty for underpayment of estimated tax. Amend tax form If you qualify to use this method, it will result in the same penalty amount as the regular method. Amend tax form However, either the annualized income installment method or the actual withholding method, explained later, may result in a smaller penalty. Amend tax form You can use the short method only if you meet one of the following requirements. Amend tax form You made no estimated tax payments for 2013 (it does not matter whether you had income tax withholding). Amend tax form You paid the same amount of estimated tax on each of the four payment due dates. Amend tax form If you do not meet either requirement, figure your penalty using the regular method in Part IV of Form 2210 and the Penalty Worksheet in the instructions. Amend tax form Note. Amend tax form If any payment was made before the due date, you can use the short method, but the penalty may be less if you use the regular method. Amend tax form However, if the payment was only a few days early, the difference is likely to be small. Amend tax form You cannot use the short method if any of the following apply. Amend tax form You made any estimated tax payments late. Amend tax form You checked box C or D in Part II of Form 2210. Amend tax form You are filing Form 1040NR or 1040NR-EZ and you did not receive wages as an employee subject to U. Amend tax form S. Amend tax form income tax withholding. Amend tax form If you use the short method, you cannot use the annualized income installment method to figure your underpayment for each payment period. Amend tax form Also, you cannot use your actual withholding during each period to figure your payments for each period. Amend tax form These methods, which may give you a smaller penalty amount, are explained under Figuring Your Underpayment (Part IV, Section A). Amend tax form Complete Part III of Form 2210 following the line-by-line instructions in the Instructions for Form 2210. Amend tax form Regular Method for Figuring the Penalty (Part IV) You can use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if you paid one or more estimated tax payments earlier than the due date. Amend tax form You must use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if any of the following apply to you. Amend tax form You paid one or more estimated tax payments on a date after the due date. Amend tax form You paid at least one, but less than four, installments of estimated tax. Amend tax form You paid estimated tax payments in un- equal amounts. Amend tax form You use the annualized income installment method to figure your underpayment for each payment period. Amend tax form You use your actual withholding during each payment period to figure your payments. Amend tax form Under the regular method, figure your underpayment for each payment period in Section A, then figure your penalty using the Penalty Worksheet in the Instructions for Form 2210. Amend tax form Enter the results on line 27 of Section B. Amend tax form Figuring Your Underpayment (Part IV, Section A) Figure your underpayment of estimated tax for each payment period in Section A following the line-by-line instructions in the Instructions for Form 2210. Amend tax form Complete lines 20 through 26 of the first column before going to line 20 of the next column. Amend tax form Required installments—line 18. Amend tax form   Your required payment for each payment period (line 18) is usually one-fourth of your required annual payment (Part I, line 9). Amend tax form This method—the regular method—is the one to use if you received your income evenly throughout the year. Amend tax form   However, if you did not receive your income evenly throughout the year, you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. Amend tax form First complete Schedule AI (Form 2210), then enter the amounts from line 25 of that schedule on line 18 of Form 2210, Part IV. Amend tax form See Annualized Income Installment Method (Schedule AI), later. Amend tax form Payments made—line 19. Amend tax form   Enter in each column the total of: Your estimated tax paid after the due date for the previous column and by the due date shown at the top of the column, and One-fourth of your withholding. Amend tax form For special rules for figuring your payments, see Form 2210 instructions for line 19. Amend tax form   If you file Form 1040, your withholding is the amount on line 62, plus any excess social security or tier 1 RRTA tax withholding on line 69. Amend tax form If you file Form 1040A, your withholding is the amount on line 36 plus any excess social security or tier 1 RRTA tax withholding included in line 41. Amend tax form Actual withholding method. Amend tax form    Instead of using one-fourth of your withholding for each quarter, you can choose to use the amounts actually withheld by each due date. Amend tax form You can make this choice separately for the tax withheld from your wages and for all other withholding. Amend tax form This includes any excess social security and tier 1 RRTA tax withheld. Amend tax form   Using your actual withholding may result in a smaller penalty if most of your withholding occurred early in the year. Amend tax form   If you use your actual withholding, you must check box D in Form 2210, Part II. Amend tax form Then complete Form 2210 using the regular method (Part IV) and file it with your return. Amend tax form Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty Figure the amount of your penalty for Section B using the Penalty Worksheet in the Form 2210 instructions. Amend tax form The penalty is imposed on each underpayment amount shown on Form 2210, Section A, line 25, for the number of days that it remained unpaid. Amend tax form For 2013, there are four rate periods—April 16 through June 30, July 1 through September 30, October 1 through December 31, and January 1, 2014 through April 15, 2014. Amend tax form A 3% rate applies to all four periods. Amend tax form Payments. Amend tax form    Before completing the Penalty Worksheet, it may be helpful to make a list of the payments you made and income tax withheld after the due date (or the last day payments could be made on time) for the earliest payment period an underpayment occurred. Amend tax form For example, if you had an underpayment for the first payment period, list your payments after April 15, 2013. Amend tax form You can use the table in the Form 2210 instructions to make your list. Amend tax form Follow those instructions for listing income tax withheld and payments made with your return. Amend tax form Use the list to determine when each underpayment was paid. Amend tax form   If you mail your estimated tax payments, use the date of the U. Amend tax form S. Amend tax form postmark as the date of payment. Amend tax form Line 1b. Amend tax form   Apply the payments listed to underpayment balance in the first column until it is fully paid. Amend tax form Apply payments in the order made. Amend tax form Figuring the penalty. Amend tax form   If an underpayment was paid in two or more payments on different dates, you must figure the penalty separately for each payment. Amend tax form On line 3 of the Penalty Worksheet enter the number of days between the due date (line 2) and the date of each payment on line 1b. Amend tax form On line 4 figure the penalty for the amount of each payment applied on line 1b or the amount remaining unpaid. Amend tax form If no payments are applied, figure the penalty on the amount on line 1a. Amend tax form Aid for counting days. Amend tax form    Table 4-1 provides a simple method for counting the number of days between a due date and a payment date. Amend tax form Find the number for the date the payment was due by going across to the column of the month the payment was due and moving down the column to the due date. Amend tax form In the same manner, find the number for the date the payment was made. Amend tax form Subtract the due date “number” from the payment date “number. Amend tax form ”   For example, if a payment was due on June 15 (61), but was not paid until September 1 (139), the payment was 78 (139 – 61) days late. Amend tax form Table 4-1. Amend tax form Calendar To Determine the Number of Days a Payment Is Late Instructions. Amend tax form Use this table with Form 2210 if you are completing Part IV, Section B. Amend tax form First, find the number for the payment due date by going across to the column of the month the payment was due and moving down the column to the due date. Amend tax form Then, in the same manner, find the number for the date the payment was made. Amend tax form Finally, subtract the due date number from the payment date number. Amend tax form The result is the number of days the payment is late. Amend tax form Example. Amend tax form The payment due date is June 15 (61). Amend tax form The payment was made on November 4 (203). Amend tax form The payment is 142 days late (203 – 61). Amend tax form Tax Year 2013 Day of 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 Month April May June July Aug. Amend tax form Sept. Amend tax form Oct. Amend tax form Nov. Amend tax form Dec. Amend tax form Jan. Amend tax form Feb. Amend tax form Mar. Amend tax form Apr. Amend tax form 1   16 47 77 108 139 169 200 230 261 292 320 351 2   17 48 78 109 140 170 201 231 262 293 321 352 3   18 49 79 110 141 171 202 232 263 294 322 353 4   19 50 80 111 142 172 203 233 264 295 323 354 5   20 51 81 112 143 173 204 234 265 296 324 355 6   21 52 82 113 144 174 205 235 266 297 325 356 7   22 53 83 114 145 175 206 236 267 298 326 357 8   23 54 84 115 146 176 207 237 268 299 327 358 9   24 55 85 116 147 177 208 238 269 300 328 359 10   25 56 86 117 148 178 209 239 270 301 329 360 11   26 57 87 118 149 179 210 240 271 302 330 361 12   27 58 88 119 150 180 211 241 272 303 331 362 13   28 59 89 120 151 181 212 242 273 304 332 363 14   29 60 90 121 152 182 213 243 274 305 333 364 15 0 30 61 91 122 153 183 214 244 275 306 334 365 16 1 31 62 92 123 154 184 215 245 276 307 335   17 2 32 63 93 124 155 185 216 246 277 308 336   18 3 33 64 94 125 156 186 217 247 278 309 337   19 4 34 65 95 126 157 187 218 248 279 310 338   20 5 35 66 96 127 158 188 219 249 280 311 339   21 6 36 67 97 128 159 189 220 250 281 312 340   22 7 37 68 98 129 160 190 221 251 282 313 341   23 8 38 69 99 130 161 191 222 252 283 314 342   24 9 39 70 100 131 162 192 223 253 284 315 343   25 10 40 71 101 132 163 193 224 254 285 316 344   26 11 41 72 102 133 164 194 225 255 286 317 345   27 12 42 73 103 134 165 195 226 256 287 318 346   28 13 43 74 104 135 166 196 227 257 288 319 347   29 14 44 75 105 136 167 197 228 258 289   348   30 15 45 76 106 137 168 198 229 259 290   349   31   46   107 138   199   260 291   350   Annualized Income Installment Method (Schedule AI) If you did not receive your income evenly throughout the year (for example, your income from a shop you operated at a marina was much larger in the summer than it was during the rest of the year), you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. Amend tax form Under this method, your required installment (Part IV, line 18) for one or more payment periods may be less than one-fourth of your required annual payment. Amend tax form To figure your underpayment using this method, complete Form 2210, Schedule AI. Amend tax form Schedule AI annualizes your tax at the end of each payment period based on your income, deductions, and other items relating to events that occurred from the beginning of the tax year through the end of the period. Amend tax form If you use the annualized income installment method, you must check box C in Part II of Form 2210. Amend tax form Also, you must attach Form 2210 and Schedule AI to your return. Amend tax form If you use Schedule AI for any payment due date, you must use it for all payment due dates. Amend tax form Completing Schedule AI. Amend tax form   Follow the Form 2210 instructions to complete Schedule AI. Amend tax form For each period shown on Schedule AI, figure your income and deductions based on your method of accounting. Amend tax form If you use the cash method of accounting (used by most people), include all income actually or constructively received during the period and all deductions actually paid during the period. Amend tax form Note. Amend tax form Each period includes amounts from the previous period(s). Amend tax form Period (a) includes items for January 1 through March 31. Amend tax form Period (b) includes items for January 1 through May 31. Amend tax form Period (c) includes items for January 1 through August 31. Amend tax form Period (d) includes items for the entire year. Amend tax form Farmers and Fishermen If you are a farmer or fisherman, the following special rules for underpayment of estimated tax apply to you. Amend tax form The penalty for underpaying your 2013 estimated tax will not apply if you file your return and pay all the tax due by March 3, 2014. Amend tax form If you are a fiscal year taxpayer, the penalty will not apply if you file your return and pay the tax due by the first day of the third month after the end of your tax year. Amend tax form Any penalty you owe for underpaying your 2013 estimated tax will be figured from one payment due date, January 15, 2014. Amend tax form The underpayment penalty for 2013 is figured on the difference between the amount of 2013 withholding plus estimated tax paid by the due date and the smaller of: 662/3% (rather than 90%) of your 2013 tax, or 100% of the tax shown on your 2012 return. Amend tax form Even if these special rules apply to you, you will not owe the penalty if you meet either of the two conditions discussed under Exceptions . Amend tax form See Who Must Pay Estimated Tax in chapter 2 for the definition of a farmer or fisherman who is eligible for these special rules. Amend tax form Form 2210-F. Amend tax form   Use Form 2210-F to figure any underpayment penalty. Amend tax form Do not attach it to your return unless you check a box in Part I. Amend tax form However, if none of the boxes apply to you and you owe a penalty, you do not need to attach Form 2210-F. Amend tax form Enter the amount from line 16 on Form 1040, line 77 and add the penalty to any balance due on your return or subtract it from your refund. Amend tax form Keep your filled-in Form 2210-F for your records. Amend tax form    If none of the boxes on Form 2210-F apply to you and you owe a penalty, the IRS can figure your penalty and send you a bill. Amend tax form Waiver of Penalty The IRS can waive the penalty for underpayment if either of the following applies. Amend tax form You did not make a payment because of a casualty, disaster, or other unusual circumstance and it would be inequitable to impose the penalty. Amend tax form You retired (after reaching age 62) or became disabled in 2012 or 2013 and both the following requirements are met. Amend tax form You had a reasonable cause for not making the payment. Amend tax form Your underpayment was not due to willful neglect. Amend tax form How to request a waiver. Amend tax form   To request a waiver, see the Instructions for Form 2210. Amend tax form Farmers and fishermen. Amend tax form   To request a waiver, see the Instructions for Form 2210-F. Amend tax form Federally declared disaster. Amend tax form   Certain estimated tax payment deadlines for taxpayers who reside or have a business in a federally declared disaster area are postponed for a period during and after the disaster. Amend tax form During the processing of your tax return, the IRS automatically identifies taxpayers located in a covered disaster area (by county or parish) and applies the appropriate penalty relief. Amend tax form Do not file Form 2210 or 2210-F if your underpayment was due to a federally declared disaster. Amend tax form If you still owe a penalty after the automatic waiver is applied, we will send you a bill. Amend tax form   Individuals, estates, and trusts not in a covered disaster area but whose books, records, or tax professionals' offices are in a covered area are also entitled to relief. Amend tax form Also eligible are relief workers affiliated with a recognized government or charitable organization assisting in the relief activities in a covered disaster area. Amend tax form If you meet either of these eligibility requirements, you must call the IRS disaster hotline at 1-866-562-5227 and identify yourself as eligible for this relief. Amend tax form   Details on the applicable disaster postponement period can be found at IRS. Amend tax form gov. Amend tax form Enter Tax Relief in Disaster Situations. Amend tax form Select the federally declared disaster that affected you. Amend tax form    Worksheet 4-1. Amend tax form 2013 Form 2210, Schedule AI—Line 12 Qualified Dividends and Capital Gain Tax Worksheet Note. Amend tax form To figure the annualized entries for lines 2, 3, and 5 below, multiply the expected amount for the period by the  annualization amount on line 2 of Schedule AI for the same period. Amend tax form                   1. Amend tax form Enter line 11 of your Schedule AI, or line 3 from Worksheet 4-2 1. Amend tax form       2. Amend tax form Enter your annualized qualified dividends for the period 2. Amend tax form           3. Amend tax form Are you filing Schedule D?               □ Yes. Amend tax form Enter the smaller of your annualized amount from line 15 or line 16 of Schedule D. Amend tax form If either line 15 or line 16 is blank or a loss, enter -0-. Amend tax form 3. Amend tax form             □ No. Amend tax form Enter your annualized capital gain distributions from Form 1040, line 13             4. Amend tax form Add lines 2 and 3   4. Amend tax form           5. Amend tax form If you are claiming investment interest expense on Form 4952, enter your annualized amount from line 4g of that form. Amend tax form Otherwise, enter -0-   5. Amend tax form           6. Amend tax form Subtract line 5 from line 4. Amend tax form If zero or less, enter -0- 6. Amend tax form       7. Amend tax form Subtract line 6 from line 1. Amend tax form If zero or less, enter -0- 7. Amend tax form       8. Amend tax form Enter: $36,900 if single or married filing separately, $73,800 if married filing jointly or qualifying widow(er), $49,400 if head of household. Amend tax form 8. Amend tax form       9. Amend tax form Enter the smaller of line 1 or line 8 9. Amend tax form       10. Amend tax form Enter the smaller of line 7 or line 9 10. Amend tax form       11. Amend tax form Subtract line 10 from line 9. Amend tax form This amount is taxed at 0% 11. Amend tax form       12. Amend tax form Enter the smaller of line 1 or line 6 12. Amend tax form       13. Amend tax form Enter the amount from line 11 13. Amend tax form       14. Amend tax form Subtract line 13 from line 12 14. Amend tax form       15. Amend tax form Multiply line 14 by 15% (. Amend tax form 15) 15. Amend tax form   16. Amend tax form Figure the tax on the amount on line 7. Amend tax form If the amount on line 7 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. Amend tax form If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 16. Amend tax form   17. Amend tax form Add lines 15 and 16 17. Amend tax form   18. Amend tax form Figure the tax on the amount on line 1. Amend tax form If the amount on line 1 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. Amend tax form If the amount on line 1 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 18. Amend tax form   19. Amend tax form Tax on all taxable income. Amend tax form Enter the smaller of line 17 or line 18. Amend tax form Also enter this amount on line 12 of Schedule AI in the appropriate column. Amend tax form However, if you are using this worksheet to figure the tax on the amount on line 3 of Worksheet 4-2, enter the amount from line 19 on Worksheet 4-2, line 4 19. Amend tax form   Worksheet 4-2. Amend tax form 2013 Form 2210, Schedule AI—Line 12 Foreign Earned Income Tax Worksheet Before you begin:If Schedule AI, line 11, is zero for the period, do not complete this worksheet. Amend tax form             1. Amend tax form Enter the amount from line 11 of Schedule AI for the period 1. Amend tax form   2. Amend tax form Enter the annualized amount* of foreign earned income and housing amount excluded or deducted (from  Form 2555, lines 45 and 50, or Form 2555-EZ, line 18) in figuring the amount entered for the period on line 1  of Schedule AI 2. Amend tax form   3. Amend tax form Add lines 1 and 2 3. Amend tax form   4. Amend tax form Tax on the amount on line 3. Amend tax form Use the Tax Table, Tax Computation Worksheet, Form 8615**, Qualified Dividends and Capital Gain Tax Worksheet***, or Schedule D Tax Worksheet***, whichever applies. Amend tax form See the 2013 Instructions for Form 1040, line 44, to find out which tax computation method to use. Amend tax form (Note. Amend tax form You do not have to use the same method for each period on Schedule AI. Amend tax form ) 4. Amend tax form   5. Amend tax form Tax on the amount on line 2. Amend tax form If the amount on line 2 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. Amend tax form If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 5. Amend tax form   6. Amend tax form Subtract line 5 from line 4. Amend tax form Enter the result here and on line 12 of Schedule AI. Amend tax form If zero or less,  enter -0- 6. Amend tax form             * To figure the annualized amount for line 2, multiply the exclusion or deduction for the period by the annualization amount on line 2 of Schedule AI for the same period. Amend tax form     ** If you use Form 8615 to figure the tax on line 4 above, enter the amount from line 3 above on line 4 of Form 8615. Amend tax form If the child's parent files Form 2555 or 2555-EZ, enter the amounts from lines 3 and 4 of the parent's Foreign Earned Income Tax Worksheet on lines 6 and 10, respectively, of Form 8615. Amend tax form Complete the rest of Form 8615 according to its instructions. Amend tax form Then complete lines 5 and 6 above. Amend tax form     *** Enter the amount from line 3 above on line 1 of the Qualified Dividends and Capital Gain Tax Worksheet (or Worksheet 4-1 in this chapter) or the Schedule D Tax Worksheet, whichever worksheet you use to figure the tax on line 4 above. Amend tax form Complete that worksheet through line 6 (line 10 if you use the Schedule D Tax Worksheet). Amend tax form Next, determine if you have a capital gain excess. Amend tax form     Figuring capital gain excess. Amend tax form To find out if you have a capital gain excess for the appropriate period, subtract line 11 of Schedule AI from line 6 of Worksheet 4-1 or your Qualified Dividends and Capital Gain Tax Worksheet (line 10 of your Schedule D Tax Worksheet). Amend tax form If the result is more than zero, that amount is your capital gain excess. Amend tax form     No capital gain excess. Amend tax form If you do not have a capital gain excess, complete the rest of Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or the Schedule D Tax Worksheet according to the worksheet's instructions. Amend tax form Then complete lines 5 and 6 above. Amend tax form     Capital gain excess. Amend tax form If you have a capital gain excess, complete a second Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or Schedule D Tax Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. Amend tax form Then complete lines 5 and 6 above. Amend tax form     Make the modifications below only for purposes of filling out Worksheet 4-2 above. Amend tax form     a. Amend tax form Reduce (but not below zero) the amount you otherwise would enter on line 3 of your Worksheet 4-1, line 3 of your Qualified Dividends and Capital Gain Tax Worksheet, or line 9 of your Schedule D Tax Worksheet by your capital gain excess. Amend tax form     b. Amend tax form Reduce (but not below zero) the amount you otherwise would enter on line 2 of your Worksheet 4-1, line 2 of your Qualified Dividends and Capital Gain Tax Worksheet, or line 6 of your Schedule D Tax Worksheet by any of your capital gain excess not used in (a) above. Amend tax form     c. Amend tax form Reduce (but not below zero) the amount on your Schedule D (Form 1040), line 18, by your capital gain excess. Amend tax form     d. Amend tax form Include your capital gain excess as a loss on line 16 of your Unrecaptured Section 1250 Gain Worksheet in the 2013 Instructions for Schedule D (Form 1040). Amend tax form   Prev  Up  Next   Home   More Online Publications
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The Amend Tax Form

Amend tax form 35. Amend tax form   Education Credits Table of Contents Introduction Useful Items - You may want to see: Who Can Claim an Education Credit Qualified Education ExpensesNo Double Benefit Allowed Adjustments to Qualified Education Expenses Introduction For 2013, there are two tax credits available to persons who pay expenses for higher (postsecondary) education. Amend tax form They are: The American opportunity credit, and The lifetime learning credit. Amend tax form The chapter will present an overview of these education credits. Amend tax form To get the detailed information you will need to claim either of the credits, and for examples illustrating that information, see chapters 2 and 3 of Publication 970. Amend tax form Can you claim more than one education credit this year?   For each student, you can choose for any year only one of the credits. Amend tax form For example, if you choose to take the American opportunity credit for a child on your 2013 tax return, you cannot, for that same child, also claim the lifetime learning credit for 2013. Amend tax form   If you are eligible to claim the American opportunity credit and you are also eligible to claim the lifetime learning credit for the same student in the same year, you can choose to claim either credit, but not both. Amend tax form   If you pay qualified education expenses for more than one student in the same year, you can choose to take the American opportunity and the lifetime learning credits on a per-student, per-year basis. Amend tax form This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. Amend tax form Table 35-1. Amend tax form Comparison of Education Credits Caution. Amend tax form You can claim both the American opportunity credit and the lifetime learning credit on the same return—but not for the same student. Amend tax form   American Opportunity Credit Lifetime Learning Credit Maximum credit Up to $2,500 credit per eligible student Up to $2,000 credit per return Limit on modified adjusted gross income (MAGI) $180,000 if married filing jointly;  $90,000 if single, head of household, or qualifying widow(er) $127,000 if married filing jointly;  $63,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable 40% of credit may be refundable Credit limited to the amount of tax you must pay on your taxable income Number of years of postsecondary education Available ONLY if the student had not completed the first 4 years of postsecondary education before 2013 Available for all years of postsecondary education and for courses to acquire or improve job skills Number of tax years credit available Available ONLY for 4 tax years per eligible student (including any year(s) the Hope credit was claimed) Available for an unlimited number of years Type of program required Student must be pursuing a program leading to a degree or other recognized education credential Student does not need to be pursuing a program leading to a degree or other recognized education credential Number of courses Student must be enrolled at least half time for at least one academic period beginning during the tax year Available for one or more courses Felony drug conviction At the end of 2013, the student had not been convicted of a felony for possessing or distributing a controlled substance Felony drug convictions do not make the student ineligible Qualified expenses Tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance Tuition and fees required for enrollment or attendance (including amounts required to be paid to the institution for course-related books, supplies, and equipment) Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Differences between the American opportunity and lifetime learning credits. Amend tax form   There are several differences between these two credits. Amend tax form These differences are summarized in Table 35-1, later. Amend tax form Useful Items - You may want to see: Publication 970 Tax Benefits for Education Form (and Instructions) 8863 Education Credits (American Opportunity and Lifetime Learning Credits) Who Can Claim an Education Credit You may be able to claim an education credit if you, your spouse, or a dependent you claim on your tax return was a student enrolled at or attending an eligible educational institution. Amend tax form The credits are based on the amount of qualified education expenses paid for the student in 2013 for academic periods beginning in 2013 and in the first 3 months of 2014. Amend tax form For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning in January 2014, you may be able to use that $1,500 in figuring your 2013 education credit(s). Amend tax form Academic period. Amend tax form   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 tax form 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 tax form Eligible educational institution. Amend tax form   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 tax form S. Amend tax form Department of Education. Amend tax form It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Amend tax form The educational institution should be able to tell you if it is an eligible educational institution. Amend tax form   Certain educational institutions located outside the United States also participate in the U. Amend tax form S. Amend tax form Department of Education's Federal Student Aid (FSA) programs. Amend tax form Who can claim a dependent's expenses. Amend tax form   If an exemption is allowed as a deduction for any person who claims the student as a dependent, all qualified education expenses of the student are treated as having been paid by that person. Amend tax form Therefore, only that person can claim an education credit for the student. Amend tax form If a student is not claimed as a dependent on another person's tax return, only the student can claim a credit. Amend tax form Expenses paid by a third party. Amend tax form   Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. Amend tax form However, qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. Amend tax form Therefore, you are treated as having paid expenses that were paid by the third party. Amend tax form For more information and an example see Who Can Claim a Dependent's Expenses in Pub. Amend tax form 970, chapter 2 or 3. Amend tax form Who cannot claim a credit. Amend tax form   You cannot take an education credit if any of the following apply. Amend tax form You are claimed as a dependent on another person's tax return, such as your parent's return. Amend tax form Your filing status is married filing separately. Amend tax form You (or your spouse) were a nonresident alien for any part of 2013 and did not elect to be treated as a resident alien for tax purposes. Amend tax form Your MAGI is one of the following. Amend tax form American opportunity credit: $180,000 or more if married filing jointly, or $90,000 or more if single, head of household, or qualifying widow(er). Amend tax form Lifetime learning credit: $127,000 or more if married filing jointly, or $63,000 or more if single, head of household, or qualifying widow(er) . Amend tax form   Generally, your MAGI is the amount on your Form 1040, line 38, or Form 1040A, line 22. Amend tax form However, if you are filing Form 2555, Form 2555–EZ, or Form 4563, or are excluding income from Puerto RIco, add to the amount on your Form 1040, line 38, or Form 1040A, line 22, the amount of income you excluded. Amend tax form For details, see Pub. Amend tax form 970. Amend tax form    Figure 35-A may be helpful in determining if you can claim an education credit on your tax return. Amend tax form The American opportunity credit will always be greater than or equal to the lifetime learning credit for any student who is eligible for both credits. Amend tax form However, if any of the conditions for the American opportunity credit, listed in Table 35-1 earlier, are not met for any student, you cannot take the American opportunity credit for that student. Amend tax form You may be able to take the lifetime learning credit for part or all of that student's qualified education expenses instead. Amend tax form See Pub. Amend tax form 970 for information on other education benefits. Amend tax form Qualified Education Expenses Generally, qualified education expenses are amounts paid in 2013 for tuition and fees required for the student's enrollment or attendance at an eligible educational institution. Amend tax form It does not matter whether the expenses were paid in cash, by check, by credit or debit card, or with borrowed funds. Amend tax form For course-related books, supplies, and equipment, only certain expenses qualify. Amend tax form American opportunity credit: Qualified education expenses include amounts spent on books, supplies, and equipment needed for a course of study, whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance. Amend tax form Lifetime learning credit: Qualified education expenses include amounts for books, supplies, and equipment only if required to be paid to the institution as a condition of enrollment or attendance. Amend tax form Qualified education expenses include nonacademic fees, such as student activity fees, athletic fees, or other expenses unrelated to the academic course of instruction, only if the fee must be paid to the institution as a condition of enrollment or attendance. Amend tax form However, fees for personal expenses (described below) are never qualified education expenses. Amend tax form Qualified education expenses for either credit do not include amounts paid for: Personal expenses. Amend tax form This means room and board, insurance, medical expenses (including student health fees), transportation, and other similar personal, living, or family expenses. Amend tax form Any course or other education involving sports, games, or hobbies, or any noncredit course, unless such course or other education is part of the student's degree program or (for the lifetime learning credit only) helps the student acquire or improve job skills. Amend tax form You should receive Form 1098–T, Tuition Statement, from the institution reporting either payments received in 2013 (box 1) or amounts billed in 2013 (box 2). Amend tax form However, the amount in box 1 or 2 of Form 1098–T may be different from the amount you paid (or are treated as having paid). Amend tax form In completing Form 8863, use only the amounts you actually paid (plus any amounts you are treated as having paid) in 2013, reduced as necessary, as described in Adjustments to Qualified Education Expenses , later. Amend tax form Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. Amend tax form Qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. Amend tax form If you or the student takes a deduction for higher education expenses, such as on Schedule A or C (Form 1040), you cannot use those expenses in your qualified education expenses when figuring your education credits. Amend tax form Qualified education expenses for any academic period must be reduced by any tax-free educational assistance allocable to that academic period. Amend tax form See Adjustments to Qualified Education Expenses, later. Amend tax form Prepaid Expenses. Amend tax form   Qualified education expenses paid in 2013 for an academic period that begins in the first 3 months of 2014 can be used in figuring an education credit for 2013 only. Amend tax form See Academic period , earlier. Amend tax form 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 an education credit for 2013 only (if you meet all the other requirements). Amend tax form    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). Amend tax form Paid with borrowed funds. Amend tax form   You can claim an education credit for qualified education expenses paid with the proceeds of a loan. Amend tax form Use the expenses to figure the credit for the year in which the expenses are paid, not the year in which the loan is repaid. Amend tax form Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. Amend tax form Student withdraws from class(es). Amend tax form   You can claim an education credit for qualified education expenses not refunded when a student withdraws. Amend tax form No Double Benefit Allowed You cannot do any of the following. Amend tax form Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim an education credit based on those same expenses. Amend tax form Claim more than one education credit based on the same qualified education expenses. Amend tax form Claim an education credit based on the same expenses used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP). Amend tax form Claim an education credit based on qualified education expenses paid with educational assistance, such as a tax-free scholarship, grant, or employer-provided educational assistance. Amend tax form See Adjustments to Qualified Education Expenses, next. Amend tax form Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid in 2013 by or on behalf of that student under the following rules. Amend tax form The result is the amount of adjusted qualified education expenses for each student. Amend tax form Tax-free educational assistance. Amend tax form   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. Amend tax form See Academic period , earlier. Amend tax form      Tax-free educational assistance includes:    Tax-free parts of scholarships and fellowships (see chapter 12 of this publication and chapter 1 of Pub. Amend tax form 970), The tax-free part of Pell grants (see chapter 1 of Pub. Amend tax form 970), The tax-free part of employer-provided educational assistance (see Pub. Amend tax form 970), Veterans' educational assistance (see chapter 1 of Pub. Amend tax form 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Amend tax form Generally, any scholarship or fellowship is treated as tax-free educational assistance. Amend tax form However, a scholarship or fellowship is not treated as tax-free educational assistance to the extent the student includes it in gross income (if the student is 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. Amend tax form 970, chapter 1; or 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. Amend tax form 970, chapter 1. Amend tax form You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year received. Amend tax form For details, see Adjustments of Qualified Education Expenses, in chapters 2 and 3 of Pub. Amend tax form 970. Amend tax form Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. Amend tax form 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). Amend tax form 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. Amend tax form 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. Amend tax form Refunds. Amend tax form   A refund of qualified education expenses may reduce qualified education expenses for the tax year or may require you to repay (recapture) the credit that you claimed in an earlier year. Amend tax form Some tax-free educational assistance received after 2013 may be treated as a refund. Amend tax form See Tax-free educational assistance, earlier. Amend tax form Refunds received in 2013. Amend tax form   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. Amend tax form Refunds received after 2013 but before your income tax return is filed. Amend tax form   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student 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. Amend tax form Refunds received after 2013 and after your income tax return is filed. Amend tax form   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received after you file your 2013 income tax return, you may need to repay some or all of the credit that you claimed. Amend tax form See Credit recapture, next. Amend tax form Credit recapture. Amend tax form    If any tax-free educational assistance for the qualified education expenses paid in 2013, or any refund of your qualified education expenses paid in 2013, is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. Amend tax form You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. Amend tax form You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you had claimed the refigured credit(s). Amend tax form Include that amount as an additional tax for the year the refund or tax-free assistance was received. Amend tax form Example. Amend tax form    You paid $8,000 tuition and fees in December 2013 for your child's Spring semester beginning in January 2014. Amend tax form You filed your 2013 tax return on February 3, 2014, and claimed a lifetime learning credit of $1,600 ($8,000 qualified education expense paid x . Amend tax form 20). Amend tax form You claimed no other tax credits. Amend tax form After you filed your return, your child withdrew from two courses and you received a refund of $1,400. Amend tax form You must refigure your 2013 lifetime learning credit using $6,600 ($8,000 qualified education expenses − $1,400 refund). Amend tax form The refigured credit is $1,320 and your tax liability increased by $280. Amend tax form You must include the difference of $280 ($1,600 credit originally claimed − $1,320 refigured credit) as additional tax on your 2014 income tax return. Amend tax form See the instructions for your 2014 income tax return to determine where to include this tax. Amend tax form If you also pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. Amend tax form Amounts that do not reduce qualified education expenses. Amend tax form   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. Amend tax form   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. Amend tax form 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, as defined in Chapter 1 of Pub. Amend tax form 970. Amend tax form The use of the money is not restricted. Amend tax form   For examples, see chapter 2 in Pub. Amend tax form 970. Amend tax form Figure 35-A. Amend tax form Can You Claim an Education Credit for 2013? This image is too large to be displayed in the current screen. Amend tax form Please click the link to view the image. Amend tax form Figure 35-A. Amend tax form Can You Claim an Education Credit for 2013? Prev  Up  Next   Home   More Online Publications