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

Freefilefillableforms 3. Freefilefillableforms   Credit for Withholding and Estimated Tax for 2013 Table of Contents Introduction Topics - This chapter discusses: WithholdingForm W-2 Form W-2G The 1099 Series Form Not Correct Form Received After Filing Separate Returns Fiscal Years (FY) Estimated TaxSeparate Returns Divorced Taxpayers Excess Social Security or Railroad Retirement Tax WithholdingJoint returns. Freefilefillableforms Worksheet for Nonrailroad Employees Worksheets for Railroad Employees Introduction When you file your 2013 income tax return, take credit for all the income tax and excess social security or railroad retirement tax withheld from your salary, wages, pensions, etc. Freefilefillableforms Also take credit for the estimated tax you paid for 2013. Freefilefillableforms These credits are subtracted from your total tax. Freefilefillableforms Because these credits are refundable, you should file a return and claim these credits, even if you do not owe tax. Freefilefillableforms If the total of your withholding and your estimated tax payments for any payment period is less than the amount you needed to pay by the due date for that period, you may be charged a penalty, even if the total of these credits is more than your tax for the year. Freefilefillableforms Topics - This chapter discusses: How to take credit for withholding, How to take credit for estimated taxes you paid, and How to take credit for excess social security, Medicare, or railroad retirement tax withholding. Freefilefillableforms Withholding If you had income tax withheld during 2013, you generally should be sent a statement by January 31, 2014, showing your income and the tax withheld. Freefilefillableforms Depending on the source of your income, you will receive: Form W-2, Wage and Tax Statement, Form W-2G, Certain Gambling Winnings, or A form in the 1099 series. Freefilefillableforms Form W-2 Your employer is required to provide or send Form W-2 to you no later than January 31, 2014. Freefilefillableforms You should receive a separate Form W-2 from each employer you worked for. Freefilefillableforms If you stopped working before the end of 2013, your employer could have given you your Form W-2 at any time after you stopped working. Freefilefillableforms However, your employer must provide or send it to you by January 31, 2014. Freefilefillableforms If you ask for the form, your employer must send it to you within 30 days after receiving your written request or within 30 days after your final wage payment, whichever is later. Freefilefillableforms If you have not received your Form W-2 by January 31, contact your employer or payer to request a copy. Freefilefillableforms If you still do not get the form by February 15, the IRS can help you by requesting the form from your employer. Freefilefillableforms The phone number for the IRS is listed in chapter 5. Freefilefillableforms You will be asked for the following information. Freefilefillableforms Your name, address, city and state, zip code, and social security number. Freefilefillableforms Your employer's name, address, city, state, zip code, and the employer's identification number (if known). Freefilefillableforms An estimate of the wages you earned, the federal income tax withheld, and the period you worked for that employer. Freefilefillableforms The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible. Freefilefillableforms Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. Freefilefillableforms Total the federal income tax withheld (shown in box 2 of all Forms W-2 received) and enter that amount on the appropriate line of your tax return. Freefilefillableforms In addition, Form W-2 is used to report any taxable sick pay you received and any income tax withheld from your sick pay. Freefilefillableforms Your sick pay may be combined with other wages in one Form W-2 or you may receive a separate Form W-2 for sick pay. Freefilefillableforms If you file a paper tax return, attach Copy B of Form W-2 to your return. Freefilefillableforms Form W-2G If you had gambling winnings in 2013, the payer may have withheld income tax. Freefilefillableforms If tax was withheld, the payer will give you a Form W-2G showing the amount you won and the amount of tax withheld. Freefilefillableforms Report the amounts you won on line 21 of Form 1040. Freefilefillableforms Take credit for the tax withheld on line 62 of Form 1040. Freefilefillableforms If you had gambling winnings, you must use Form 1040; you cannot use Form 1040A or Form 1040EZ. Freefilefillableforms Gambling losses can be deducted on Schedule A (Form 1040) as a miscellaneous itemized deduction. Freefilefillableforms However, you cannot deduct more than the gambling winnings you report on Form 1040. Freefilefillableforms File Form W-2G with your income tax return only if it shows any federal income tax withheld in box 2. Freefilefillableforms The 1099 Series Most forms in the 1099 series are not filed with your return. Freefilefillableforms In general, these forms should be furnished to you by January 31, 2014. Freefilefillableforms Unless instructed to file any of these forms with your return, keep them for your records. Freefilefillableforms There are several different forms in this series, including: Form 1099-B, Proceeds From Broker and Barter Exchange Transactions; Form 1099-C, Cancellation of Debt; Form 1099-DIV, Dividends and Distributions; Form 1099-G, Certain Government Payments; Form 1099-INT, Interest Income; Form 1099-K, Payment Card and Third-Party Network Transactions; Form 1099-MISC, Miscellaneous Income; Form 1099-OID, Original Issue Discount; Form 1099-PATR, Taxable Distributions Received From Cooperatives; Form 1099-Q, Payments From Qualified Education Programs (Under Sections 529 and 530); Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Freefilefillableforms ; Form SSA-1099, Social Security Benefit Statement; and Form RRB-1099, Payments by the Railroad Retirement Board. Freefilefillableforms If you received the types of income reported on some forms in the 1099 series, you may not be able to use Form 1040A or Form 1040EZ. Freefilefillableforms See the instructions to these forms for details. Freefilefillableforms Reporting your withholding. Freefilefillableforms   Report on your tax return all federal income tax withholding shown on your Form 1099, Form SSA-1099, and/or Form RRB-1099. Freefilefillableforms Include the amount withheld in the total on line 62 of Form 1040, line 36 of Form 1040A, or line 7 of Form 1040EZ. Freefilefillableforms Form 1099-R. Freefilefillableforms   Attach Form 1099-R to your paper return if federal income tax withholding is shown in box 4. Freefilefillableforms Do not attach any other Form 1099. Freefilefillableforms Form Not Correct If you receive a form with incorrect information, you should ask the payer for a corrected form. Freefilefillableforms Call the telephone number or write to the address given for the payer on the form. Freefilefillableforms The corrected Form W-2G or Form 1099 you receive will have an “X” in the “CORRECTED” box at the top of the form. Freefilefillableforms A special form, Form W-2c, Corrected Wage and Tax Statement, is used to correct a Form W-2. Freefilefillableforms In certain situations, you will receive two forms in place of the original incorrect form. Freefilefillableforms This will happen when your taxpayer identification number is wrong or missing, your name and address are wrong, or you received the wrong type of form (for example, a Form 1099-DIV instead of a Form 1099-INT). Freefilefillableforms One new form you receive will be the same incorrect form or have the same incorrect information, but all money amounts will be zero. Freefilefillableforms This form will have an “X” in the “CORRECTED” box at the top of the form. Freefilefillableforms The second new form should have all the correct information, prepared as though it is the original (the “CORRECTED” box will not be checked). Freefilefillableforms Form Received After Filing If you file your return and you later receive a form for income that you did not include on your return, report the income and take credit for any income tax withheld by filing Form 1040X, Amended U. Freefilefillableforms S. Freefilefillableforms Individual Income Tax Return. Freefilefillableforms Separate Returns If you are married but file a separate return, you can take credit only for the tax withheld from your own income. Freefilefillableforms Do not include any amount withheld from your spouse's income. Freefilefillableforms However, different rules may apply if you live in a community property state. Freefilefillableforms Community property states. Freefilefillableforms   The following are community property states. Freefilefillableforms Arizona. Freefilefillableforms California. Freefilefillableforms Idaho. Freefilefillableforms Louisiana. Freefilefillableforms Nevada. Freefilefillableforms New Mexico. Freefilefillableforms Texas. Freefilefillableforms Washington. Freefilefillableforms Wisconsin. Freefilefillableforms Generally, if you live in a community property state and file a separate return, you and your spouse each must report half of all community income in addition to your own separate income. Freefilefillableforms If you are required to report half of all community income, you are entitled to take credit for half of all taxes withheld on the community income. Freefilefillableforms If you were divorced during the year, each of you generally must report half the community income and can take credit for half the withholding on that community income for the period before the divorce. Freefilefillableforms   For more information on these rules, and some exceptions, see Publication 555, Community Property. Freefilefillableforms Fiscal Years (FY) If you file your tax return on the basis of a fiscal year (a 12-month period ending on the last day of any month except December), you must follow special rules, described below, to determine your credit for federal income tax withholding. Freefilefillableforms Fiscal year withholding. Freefilefillableforms    You can claim credit on your tax return only for the tax withheld during the calendar year (CY) ending within your fiscal year. Freefilefillableforms You cannot claim credit for any of the tax withheld during the calendar year beginning in your fiscal year. Freefilefillableforms You will be able to claim credit for that withholding on your return for your next fiscal year. Freefilefillableforms   The Form W-2 or 1099 you receive for the calendar year that ends during your fiscal year will show the tax withheld and the income you received during that calendar year. Freefilefillableforms   Although you take credit for all the withheld tax shown on the form, report only the part of the income shown on the form that you received during your fiscal year. Freefilefillableforms Add to that the income you received during the rest of your fiscal year. Freefilefillableforms Example. Freefilefillableforms Miles Hanson files his return for a fiscal year ending June 30, 2013. Freefilefillableforms In January 2013, he received a Form W-2 that showed that his wages for 2012 were $31,200 and that his income tax withheld was $3,380. Freefilefillableforms His records show that he had received $15,000 of the wages by June 30, 2012, and $16,200 from July 1 through December 31, 2012. Freefilefillableforms See Table 3-1 . Freefilefillableforms On his return for the fiscal year ending June 30, 2013, Miles will report the $16,200 he was paid in July through December of 2012, plus the $18,850 he was paid during the rest of the fiscal year, January 1, 2013, through June 30, 2013. Freefilefillableforms However, he takes credit for all $3,380 that was withheld during 2012. Freefilefillableforms On his return for the fiscal year ending June 30, 2012, he reported the $15,000 he was paid in January through June 2012, but took no credit for the tax withheld during that time. Freefilefillableforms On his return for the fiscal year ending June 30, 2014, he will take the credit for any tax withheld during 2013 but not for any tax withheld during 2014. Freefilefillableforms Table 3-1. Freefilefillableforms Example for Fiscal Year Ending June 30, 2013—Miles Hanson Date Form W-2 Miles' records Tax return for FY ending 6/30/20121 Tax return for FY ending 6/30/2013 Wages With- holding Wages With- holding Wages With- holding Wages With- holding CY 20122 $31,200 $3,380             1/1/2012 –  6/30/2012     $15,000 $1,600 $15,000       7/1/2012 –  12/31/2012     $16,200 $1,780     $16,200 $3,380 CY 2013 $37,700 $4,316 3             1/1/2013 –  6/30/2013     $18,850 $2,158     $18,850   7/1/2013 –  12/31/2013     $18,850 4 $2,158         1Miles' tax return for FY ending 6/30/2012 also included his wages for 7/1–12/31/2011 and the withholding shown on his 2011 Form W-2. Freefilefillableforms  2Calendar year (January 1 – December 31). Freefilefillableforms   3Withholding shown on 2013 Form W-2 ($4,316) will be included in Miles' tax return for FY ending 6/30/2014, the fiscal year in which calendar year 2013 ends. Freefilefillableforms   4Wages for 7/1–12/31/2013 ($18,850) will be included in Miles' tax return for FY ending 6/30/2014, the fiscal year in which the wages were received. Freefilefillableforms Backup withholding. Freefilefillableforms   If income tax has been withheld under the backup withholding rule, take credit for it on your tax return for the fiscal year in which you received the income. Freefilefillableforms Example. Freefilefillableforms Emily Smith's records show that she received income in November 2013 and February 2014 from which there was backup withholding ($100 and $50, respectively). Freefilefillableforms Emily takes credit for the entire $150 of backup withholding on her tax return for the fiscal year ending September 30, 2014. Freefilefillableforms Estimated Tax Take credit for all your estimated tax payments for 2013 on line 63 of Form 1040 or line 37 of Form 1040A. Freefilefillableforms Include any overpayment from 2012 that you had credited to your 2013 estimated tax. Freefilefillableforms You must use Form 1040 or Form 1040A if you paid estimated tax. Freefilefillableforms You cannot file Form 1040EZ. Freefilefillableforms If you were a beneficiary of an estate or trust, you should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. Freefilefillableforms , from the fiduciary. Freefilefillableforms If you have estimated taxes credited to you from the estate or trust (from Schedule K-1 (Form 1041)), you must report the estimated taxes on Schedule E (Form 1040). Freefilefillableforms On the dotted line next to the entry space for line 37 of Schedule E (Form 1040), enter “ES payment claimed” and the amount. Freefilefillableforms However, do not include this amount in the total on line 37. Freefilefillableforms Instead, enter the amount on Form 1040, line 63. Freefilefillableforms This estimated tax payment for 2013 is treated as being made by you on January 15, 2014. Freefilefillableforms Name changed. Freefilefillableforms   If you changed your name, and you made estimated tax payments using your former name, attach a statement to the front of your paper tax return indicating: When you made the payments, The amount of each payment, Your name when you made the payments, and The social security number under which you made the payments. Freefilefillableforms  The statement should cover payments you made jointly with your spouse as well as any you made separately. Freefilefillableforms   Be sure to report the change to your local Social Security Administration office before filing your 2014 tax return. Freefilefillableforms This prevents delays in processing your return and issuing refunds. Freefilefillableforms It also safeguards your future social security benefits. Freefilefillableforms For more information, call the Social Security Administration at 1-800-772-1213. Freefilefillableforms Separate Returns If you and your spouse made separate estimated tax payments for 2013 and you file separate returns, you can take credit only for your own payments. Freefilefillableforms If you made joint estimated tax payments, you must decide how to divide the payments between your returns. Freefilefillableforms One of you can claim all of the estimated tax paid and the other none, or you can divide it in any other way you agree on. Freefilefillableforms If you cannot agree, you must divide the payments in proportion to each spouse's individual tax as shown on your separate returns for 2013. Freefilefillableforms Example. Freefilefillableforms James and Evelyn Brown made joint estimated tax payments for 2013 totaling $3,000. Freefilefillableforms They file separate 2013 Forms 1040. Freefilefillableforms James' tax is $4,000 and Evelyn's is $1,000. Freefilefillableforms If they do not agree on how to divide the $3,000, they must divide it proportionately between their returns. Freefilefillableforms Because James' tax ($4,000) is 80% of the total tax ($5,000), his share of the estimated tax is $2,400 (80% of $3,000). Freefilefillableforms The balance, $600 (20% of $3,000), is Evelyn's share. Freefilefillableforms Divorced Taxpayers If you made joint estimated tax payments for 2013 and you were divorced during the year, either you or your former spouse can claim all of the joint payments, or you each can claim part of them. Freefilefillableforms If you cannot agree on how to divide the payments, you must divide them in proportion to each spouse's individual tax as shown on your separate returns for 2013. Freefilefillableforms See Example earlier under Separate Returns. Freefilefillableforms If you claim any of the joint payments on your tax return, enter your former spouse's social security number (SSN) in the space provided at the top of page 1 of Form 1040 or Form 1040A. Freefilefillableforms If you divorced and remarried in 2013, enter your present spouse's SSN in that space. Freefilefillableforms Enter your former spouse's SSN, followed by “DIV,” under Payments to the left of Form 1040, line 63, or in the blank space to the left of Form 1040A, line 37. Freefilefillableforms Excess Social Security or Railroad Retirement Tax Withholding Most employers must withhold social security tax from your wages. Freefilefillableforms In some cases, however, the federal government and state and local governments do not have to withhold social security tax from their employees' wages. Freefilefillableforms If you work for a railroad employer, that employer must withhold tier 1 railroad retirement (RRTA) tax and tier 2 RRTA tax. Freefilefillableforms Two or more employers. Freefilefillableforms   If you worked for two or more employers in 2013, too much social security tax or tier 1 RRTA tax may have been withheld from your pay. Freefilefillableforms You may be able to claim the excess as a credit against your income tax when you file your return. Freefilefillableforms Table 3-2 shows the maximum amount that should have been withheld for any of these taxes for 2013. Freefilefillableforms Figure the excess withholding on the appropriate worksheet. Freefilefillableforms    Table 3-2. Freefilefillableforms Maximum Social Security and RRTA Withholding for 2013 Type of tax Maximum wages subject to tax Tax rate Maximum tax to be withheld Social security $113,700 6. Freefilefillableforms 2% $7,049. Freefilefillableforms 40 Tier 1 RRTA $113,700 6. Freefilefillableforms 2% $7,049. Freefilefillableforms 40 Tier 2 RRTA $84,300 4. Freefilefillableforms 4% $3,709. Freefilefillableforms 20 Joint returns. Freefilefillableforms   If you are filing a joint return, you and your spouse must figure any excess social security or tier 1 RRTA separately. Freefilefillableforms Note. Freefilefillableforms All wages are subject to Medicare tax withholding. Freefilefillableforms Employer's error. Freefilefillableforms   If you had only one employer and he or she withheld too much social security, Medicare, or tier 1 RRTA tax, ask the employer to refund the excess amount to you. Freefilefillableforms If the employer refuses to refund the overcollection, ask for a statement indicating the amount of the overcollection to support your claim. Freefilefillableforms File a claim for refund using Form 843, Claim for Refund and Request for Abatement. Freefilefillableforms Worksheet for Nonrailroad Employees If you did not work for a railroad during 2013, figure the excess social security withholding on Worksheet 3-1. Freefilefillableforms Note. Freefilefillableforms If you worked for both a railroad employer and a nonrailroad employer, use Worksheet 3-2, to figure excess social security and tier 1 RRTA tax. Freefilefillableforms Where to claim credit for excess social security withholding. Freefilefillableforms   If you file Form 1040, enter the excess on line 69. Freefilefillableforms   If you file Form 1040A, include the excess in the total on line 41. Freefilefillableforms Write “Excess SST” and show the amount of the credit in the space to the left of the line. Freefilefillableforms   You cannot claim excess social security tax withholding on Form 1040EZ. Freefilefillableforms Worksheets for Railroad Employees If you worked for a railroad during 2013, figure your excess withholding on Worksheet 3-2 and 3-3, as appropriate. Freefilefillableforms Where to claim credit for excess tier 1 RRTA withholding. Freefilefillableforms   If you file Form 1040, enter the excess on line 69. Freefilefillableforms   If you file Form 1040A, include the excess in the total on line 41. Freefilefillableforms Write “Excess SST” and show the amount of the credit in the space to the left of the line. Freefilefillableforms   You cannot claim excess tier 1 RRTA withholding on Form 1040EZ. Freefilefillableforms How to claim refund of excess tier 2 RRTA. Freefilefillableforms   To claim a refund of tier 2 tax, use Form 843. Freefilefillableforms Be sure to attach a copy of all of your Forms W-2. Freefilefillableforms   See Worksheet 3-3 and the Instructions for Form 843, for more details. Freefilefillableforms Worksheet 3-1. Freefilefillableforms Excess Social Security—Nonrailroad Employees 1. Freefilefillableforms Add all social security tax withheld (but not more than  $7,049. Freefilefillableforms 40 for each employer). Freefilefillableforms This tax should be shown  in box 4 of your Forms W-2. Freefilefillableforms Enter the total here 1. Freefilefillableforms   2. Freefilefillableforms Enter any uncollected social security tax on tips or group-term life insurance on Form 1040, line 60, identified by “UT” 2. Freefilefillableforms   3. Freefilefillableforms Add lines 1 and 2. Freefilefillableforms If $7,049. Freefilefillableforms 40 or less, stop here. Freefilefillableforms You cannot claim the credit 3. Freefilefillableforms   4. Freefilefillableforms Social security limit 4. Freefilefillableforms $7,049. Freefilefillableforms 40 5. Freefilefillableforms Excess. Freefilefillableforms Subtract line 4 from line 3 5. Freefilefillableforms   Worksheet 3-2. Freefilefillableforms Excess Social Security and Tier 1 RRTA—Railroad Employees 1. Freefilefillableforms Add all social security and tier 1 RRTA tax withheld (but not more than $7,049. Freefilefillableforms 40 for each employer). Freefilefillableforms Social security tax should be shown in box 4 and tier 1 RRTA should be shown  in box 14 of your Forms W-2. Freefilefillableforms Enter the total here 1. Freefilefillableforms   2. Freefilefillableforms Enter any uncollected social security and tier 1 RRTA tax on tips or group-term life insurance on Form 1040, line 60, identified by “UT” 2. Freefilefillableforms   3. Freefilefillableforms Add lines 1 and 2. Freefilefillableforms If $7,049. Freefilefillableforms 40 or less, stop here. Freefilefillableforms You cannot claim the credit 3. Freefilefillableforms   4. Freefilefillableforms Social security and tier 1 RRTA tax limit 4. Freefilefillableforms $7,049. Freefilefillableforms 40 5. Freefilefillableforms Excess. Freefilefillableforms Subtract line 4 from line 3 5. Freefilefillableforms   Worksheet 3-3. Freefilefillableforms Excess Tier 2 RRTA—Railroad Employees 1. Freefilefillableforms Add all tier 2 RRTA tax withheld (but not more than $3,709. Freefilefillableforms 20 for each employer). Freefilefillableforms Box 14 of your Forms W-2 should show tier 2 RRTA tax. Freefilefillableforms Enter the total here 1. Freefilefillableforms   2. Freefilefillableforms Enter any uncollected tier 2 RRTA tax on tips or group-term life insurance on Form 1040, line 60, identified by “UT” 2. Freefilefillableforms   3. Freefilefillableforms Add lines 1 and 2. Freefilefillableforms If $3,709. Freefilefillableforms 20 or less, stop here. Freefilefillableforms You cannot claim the credit. Freefilefillableforms 3. Freefilefillableforms   4. Freefilefillableforms Tier 2 RRTA tax limit 4. Freefilefillableforms $3,709. Freefilefillableforms 20 5. Freefilefillableforms Excess. Freefilefillableforms Subtract line 4 from line 3. Freefilefillableforms 5. Freefilefillableforms   Prev  Up  Next   Home   More Online Publications