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How To File Tax Return For 2012

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How To File Tax Return For 2012

How to file tax return for 2012 3. How to file tax return for 2012   Gifts Table of Contents If you give gifts in the course of your trade or business, you can deduct all or part of the cost. How to file tax return for 2012 This chapter explains the limits and rules for deducting the costs of gifts. How to file tax return for 2012 $25 limit. How to file tax return for 2012   You can deduct no more than $25 for business gifts you give directly or indirectly to each person during your tax year. How to file tax return for 2012 A gift to a company that is intended for the eventual personal use or benefit of a particular person or a limited class of people will be considered an indirect gift to that particular person or to the individuals within that class of people who receive the gift. How to file tax return for 2012   If you give a gift to a member of a customer's family, the gift is generally considered to be an indirect gift to the customer. How to file tax return for 2012 This rule does not apply if you have a bona fide, independent business connection with that family member and the gift is not intended for the customer's eventual use. How to file tax return for 2012   If you and your spouse both give gifts, both of you are treated as one taxpayer. How to file tax return for 2012 It does not matter whether you have separate businesses, are separately employed, or whether each of you has an independent connection with the recipient. How to file tax return for 2012 If a partnership gives gifts, the partnership and the partners are treated as one taxpayer. How to file tax return for 2012 Example. How to file tax return for 2012 Bob Jones sells products to Local Company. How to file tax return for 2012 He and his wife, Jan, gave Local Company three gourmet gift baskets to thank them for their business. How to file tax return for 2012 They paid $80 for each gift basket, or $240 total. How to file tax return for 2012 Three of Local Company's executives took the gift baskets home for their families' use. How to file tax return for 2012 Bob and Jan have no independent business relationship with any of the executives' other family members. How to file tax return for 2012 They can deduct a total of $75 ($25 limit × 3) for the gift baskets. How to file tax return for 2012 Incidental costs. How to file tax return for 2012   Incidental costs, such as engraving on jewelry, or packaging, insuring, and mailing, are generally not included in determining the cost of a gift for purposes of the $25 limit. How to file tax return for 2012   A cost is incidental only if it does not add substantial value to the gift. How to file tax return for 2012 For example, the cost of gift wrapping is an incidental cost. How to file tax return for 2012 However, the purchase of an ornamental basket for packaging fruit is not an incidental cost if the value of the basket is substantial compared to the value of the fruit. How to file tax return for 2012 Exceptions. How to file tax return for 2012   The following items are not considered gifts for purposes of the $25 limit. How to file tax return for 2012 An item that costs $4 or less and: Has your name clearly and permanently imprinted on the gift, and Is one of a number of identical items you widely distribute. How to file tax return for 2012 Examples include pens, desk sets, and plastic bags and cases. How to file tax return for 2012 Signs, display racks, or other promotional material to be used on the business premises of the recipient. How to file tax return for 2012    Figure B. How to file tax return for 2012 When Are Transportation Expenses Deductible? Most employees and self-employed persons can use this chart. How to file tax return for 2012 (Do not use this chart if your home is your principal place of business. How to file tax return for 2012 See Office in the home . How to file tax return for 2012 ) Please click here for the text description of the image. How to file tax return for 2012 Figure B. How to file tax return for 2012 When Are Local Transportation Expenses Deductible?TAs for Figure B are: Reg 1. How to file tax return for 2012 162-1(a); RR 55–109; RR 94–47 Gift or entertainment. How to file tax return for 2012   Any item that might be considered either a gift or entertainment generally will be considered entertainment. How to file tax return for 2012 However, if you give a customer packaged food or beverages you intend the customer to use at a later date, treat it as a gift. How to file tax return for 2012    If you give a customer tickets to a theater performance or sporting event and you do not go with the customer to the performance or event, you have a choice. How to file tax return for 2012 You can treat the cost of the tickets as either a gift expense or an entertainment expense, whichever is to your advantage. How to file tax return for 2012   You can change your treatment of the tickets at a later date by filing an amended return. How to file tax return for 2012 Generally, an amended return must be filed within 3 years from the date the original return was filed or within 2 years from the time the tax was paid, whichever is later. How to file tax return for 2012    If you go with the customer to the event, you must treat the cost of the tickets as an entertainment expense. How to file tax return for 2012 You cannot choose, in this case, to treat the cost of the tickets as a gift expense. How to file tax return for 2012 Prev  Up  Next   Home   More Online Publications
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Tax Relief for Victims of June 19 Severe Storms in Kentucky

IN-2011-12, Sept. 2, 2011

INDIANAPOLIS — Victims of severe storms, tornadoes, and flooding that began on June 19, 2011 in parts of Kentucky may qualify for tax relief from the Internal Revenue Service.

The President has declared the following counties a federal disaster area: Bell, Knox, and Perry. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone until August 18 certain deadlines falling on or after June 19 and on or before August 18 for taxpayers who reside or have a business in the disaster area.

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after June 19 and on or before July 5, 2011, as long as the deposits were made by July 5, 2011.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until August 18 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after June 19 and on or before August 18.

The IRS also gives affected taxpayers until August 18 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (August 20, 2007), that are due to be performed on or after June 19 and on or before August 18.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after June 19 and on or before July 5 provided the taxpayer made these deposits by July 5.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.
Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “Kentucky/Severe Storms, Tornadoes, and Flooding” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.

Related Information

Page Last Reviewed or Updated: 20-Mar-2014

The How To File Tax Return For 2012

How to file tax return for 2012 6. How to file tax return for 2012   Tuition and Fees Deduction Table of Contents IntroductionWhat is the tax benefit of the tuition and fees deduction. How to file tax return for 2012 Can You Claim the DeductionWho Can Claim the Deduction Who Cannot Claim the Deduction What Expenses QualifyQualified Education Expenses No Double Benefit Allowed Expenses That Do Not Qualify Who Is an Eligible Student Who Can Claim a Dependent's Expenses Figuring the DeductionEffect of the Amount of Your Income on the Amount of Your Deduction Claiming the Deduction Illustrated Example Introduction You may be able to deduct qualified education expenses paid during the year for yourself, your spouse, or your dependent(s). How to file tax return for 2012 You cannot claim this deduction if your filing status is married filing separately or if another person can claim an exemption for you as a dependent on his or her tax return. How to file tax return for 2012 The qualified expenses must be for higher education, as explained later under Qualified Education Expenses . How to file tax return for 2012 What is the tax benefit of the tuition and fees deduction. How to file tax return for 2012   The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. How to file tax return for 2012   This deduction is taken as an adjustment to income. How to file tax return for 2012 This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). How to file tax return for 2012 This deduction may be beneficial to you if you do not qualify for the American opportunity or lifetime learning credits. How to file tax return for 2012 You can choose the education benefit that will give you the lowest tax. How to file tax return for 2012 You may want to compare the tuition and fees deduction to the education credits. How to file tax return for 2012 See chapter 2, American Opportunity Credit and chapter 3, Lifetime Learning Credit for more information on the education credits. How to file tax return for 2012 Table 6-1. How to file tax return for 2012 Tuition and Fees Deduction at a Glance summarizes the features of the tuition and fees deduction. How to file tax return for 2012 Can You Claim the Deduction The following rules will help you determine if you can claim the tuition and fees deduction. How to file tax return for 2012 Who Can Claim the Deduction Generally, you can claim the tuition and fees deduction if all three of the following requirements are met. How to file tax return for 2012 You pay qualified education expenses of higher education. How to file tax return for 2012 You pay the education expenses for an eligible student. How to file tax return for 2012 The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption on your tax return. How to file tax return for 2012 The term “qualified education expenses” is defined later under Qualified Education Expenses . How to file tax return for 2012 “Eligible student” is defined later under Who Is an Eligible Student . How to file tax return for 2012 For more information on claiming the deduction for a dependent, see Who Can Claim a Dependent's Expenses , later. How to file tax return for 2012 Table 6-1. How to file tax return for 2012 Tuition and Fees Deduction at a Glance Do not rely on this table alone. How to file tax return for 2012 Refer to the text for complete details. How to file tax return for 2012 Question Answer What is the maximum benefit? You can reduce your income subject to tax by up to $4,000. How to file tax return for 2012 What is the limit on modified adjusted gross income (MAGI)? $160,000 if married filing a joint return; $80,000 if single, head of household, or qualifying widow(er). How to file tax return for 2012 Where is the deduction taken? As an adjustment to income on  Form 1040 or Form 1040A. How to file tax return for 2012 For whom must the expenses be paid? A student enrolled in an eligible educational institution who is either: •you,  •your spouse, or  •your dependent for whom you claim an exemption. How to file tax return for 2012 What tuition and fees are deductible? Tuition and fees required for enrollment or attendance at an eligible postsecondary educational institution, but not including personal, living, or family expenses, such as room and board. How to file tax return for 2012 Who Cannot Claim the Deduction You cannot claim the tuition and fees deduction if any of the following apply. How to file tax return for 2012 Your filing status is married filing separately. How to file tax return for 2012 Another person can claim an exemption for you as a dependent on his or her tax return. How to file tax return for 2012 You cannot take the deduction even if the other person does not actually claim that exemption. How to file tax return for 2012 Your modified adjusted gross income (MAGI) is more than $80,000 ($160,000 if filing a joint return). How to file tax return for 2012 You (or your spouse) were a nonresident alien for any part of 2013 and the nonresident alien did not elect to be treated as a resident alien for tax purposes. How to file tax return for 2012 More information on nonresident aliens can be found in Publication 519. How to file tax return for 2012 What Expenses Qualify The tuition and fees deduction is based on qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. How to file tax return for 2012 Generally, the deduction is allowed for qualified education expenses paid in 2013 in connection with enrollment at an institution of higher education during 2013 or for an academic period beginning in 2013 or in the first 3 months of 2014. How to file tax return for 2012 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 deduction. How to file tax return for 2012 Academic period. How to file tax return for 2012   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. How to file tax return for 2012 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. How to file tax return for 2012 Paid with borrowed funds. How to file tax return for 2012   You can claim a tuition and fees deduction for qualified education expenses paid with the proceeds of a loan. How to file tax return for 2012 Use the expenses to figure the deduction for the year in which the expenses are paid, not the year in which the loan is repaid. How to file tax return for 2012 Treat loan disbursements sent directly to the educational institution as paid on the date the institution credits the student's account. How to file tax return for 2012 Student withdraws from class(es). How to file tax return for 2012   You can claim a tuition and fees deduction for qualified education expenses not refunded when a student withdraws. How to file tax return for 2012 Qualified Education Expenses For purposes of the tuition and fees deduction, qualified education expenses are tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. How to file tax return for 2012 Eligible educational institution. How to file tax return for 2012   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. How to file tax return for 2012 S. How to file tax return for 2012 Department of Education. How to file tax return for 2012 It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. How to file tax return for 2012 The educational institution should be able to tell you if it is an eligible educational institution. How to file tax return for 2012   Certain educational institutions located outside the United States also participate in the U. How to file tax return for 2012 S. How to file tax return for 2012 Department of Education's Federal Student Aid (FSA) programs. How to file tax return for 2012 Related expenses. How to file tax return for 2012   Student-activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance. How to file tax return for 2012 Prepaid expenses. How to file tax return for 2012   Qualified education expenses paid in 2013 for an academic period that begins in the first three months of 2014 can be used in figuring an education credit for 2013 only. How to file tax return for 2012 See Academic period , earlier. How to file tax return for 2012 For example, 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). How to file tax return for 2012 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). How to file tax return for 2012 In the following examples, assume that each student is an eligible student and each college or university an eligible educational institution. How to file tax return for 2012 Example 1. How to file tax return for 2012 Jackson is a sophomore in University V's degree program in dentistry. How to file tax return for 2012 This year, in addition to tuition, he is required to pay a fee to the university for the rental of the dental equipment he will use in this program. How to file tax return for 2012 Because the equipment rental fee must be paid to University V for enrollment and attendance, Jackson's equipment rental fee is a qualified education expense. How to file tax return for 2012 Example 2. How to file tax return for 2012 Donna and Charles, both first-year students at College W, are required to have certain books and other reading materials to use in their mandatory first-year classes. How to file tax return for 2012 The college has no policy about how students should obtain these materials, but any student who purchases them from College W's bookstore will receive a bill directly from the college. How to file tax return for 2012 Charles bought his books from a friend, so what he paid for them is not a qualified education expense. How to file tax return for 2012 Donna bought hers at College W's bookstore. How to file tax return for 2012 Although Donna paid College W directly for her first-year books and materials, her payment is not a qualified education expense because the books and materials are not required to be purchased from College W for enrollment or attendance at the institution. How to file tax return for 2012 Example 3. How to file tax return for 2012 When Marci enrolled at College X for her freshman year, she had to pay a separate student activity fee in addition to her tuition. How to file tax return for 2012 This activity fee is required of all students, and is used solely to fund on-campus organizations and activities run by students, such as the student newspaper and the student government. How to file tax return for 2012 No portion of the fee covers personal expenses. How to file tax return for 2012 Although labeled as a student activity fee, the fee is required for Marci's enrollment and attendance at College X. How to file tax return for 2012 Therefore, it is a qualified expense. How to file tax return for 2012 No Double Benefit Allowed You cannot do any of the following. How to file tax return for 2012 Deduct qualified education expenses you deduct under any other provision of the law, for example, as a business expense. How to file tax return for 2012 Deduct qualified education expenses for a student on your income tax return if you or anyone else claims an American opportunity or lifetime learning credit for that same student in the same year. How to file tax return for 2012 Deduct qualified education expenses that have been used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or a qualified tuition program (QTP). How to file tax return for 2012 For a QTP, this applies only to the amount of tax-free earnings that were distributed, not to the recovery of contributions to the program. How to file tax return for 2012 See Coordination With Tuition and Fees Deduction in chapter 8, Qualified Tuition Program, later. How to file tax return for 2012 Deduct qualified education expenses that have been paid with tax-free interest on U. How to file tax return for 2012 S. How to file tax return for 2012 savings bonds (Form 8815). How to file tax return for 2012 See Figuring the Tax-Free Amount in chapter 10, Education Savings Bond Program, later. How to file tax return for 2012 Deduct qualified education expenses that have been paid with tax-free educational assistance, such as a scholarship, grant, or assistance provided by an employer. How to file tax return for 2012 See the following section on Adjustments to Qualified Education Expenses. How to file tax return for 2012 Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. How to file tax return for 2012 The result is the amount of adjusted qualified education expenses for each student. How to file tax return for 2012 You must also reduce qualified education expenses by the other amounts referred to in No Double Benefit Allowed , earlier. How to file tax return for 2012 Tax-free educational assistance. How to file tax return for 2012   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. How to file tax return for 2012 See Academic period , earlier. How to file tax return for 2012   Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. How to file tax return for 2012 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). How to file tax return for 2012   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. How to file tax return for 2012 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. How to file tax return for 2012   This tax-free education assistance 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), 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. How to file tax return for 2012 Generally, any scholarship or fellowship is treated as tax free. How to file tax return for 2012 However, a scholarship or fellowship is not treated as tax free 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 of the following is true. How to file tax return for 2012 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 chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. How to file tax return for 2012 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 chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. How to file tax return for 2012 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 it is received. How to file tax return for 2012 For details, see Adjustments to Qualified Education Expenses in chapters 2 and 3. How to file tax return for 2012 Refunds. How to file tax return for 2012   A refund of qualified education expenses may reduce adjusted qualified education expenses for the tax year or require repayment (recapture) of a credit claimed in an earlier year. How to file tax return for 2012 Some tax-free educational assistance received after 2013 may be treated as a refund. How to file tax return for 2012 See Tax-free educational assistance , earlier. How to file tax return for 2012 Refunds received in 2013. How to file tax return for 2012   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses for 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. How to file tax return for 2012 Refunds received after 2013 but before your income tax return is filed. How to file tax return for 2012   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid before you file an income tax return for 2013, the amount of qualified education expenses for 2013 is reduced by the amount of the refund. How to file tax return for 2012 Refunds received after 2013 and after your income tax return is filed. How to file tax return for 2012   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid after you file an income tax return for 2013, you may need to repay some or all of the credit. How to file tax return for 2012 See Credit recapture , later. How to file tax return for 2012 Coordination with Coverdell education savings accounts and qualified tuition programs. How to file tax return for 2012   Reduce your qualified education expenses by any qualified education expenses used to figure the exclusion from gross income of (a) interest received under an education savings bond program, or (b) any distribution from a Coverdell education savings account or qualified tuition program (QTP). How to file tax return for 2012 For a QTP, this applies only to the amount of tax-free earnings that were distributed, not to the recovery of contributions to the program. How to file tax return for 2012 Credit recapture. How to file tax return for 2012    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. How to file tax return for 2012 You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing that amount by the amount of the refund or tax-free educational assistance. How to file tax return for 2012 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). How to file tax return for 2012 Include that amount as an additional tax for the year the refund or tax-free assistance was received. How to file tax return for 2012 Example. How to file tax return for 2012   You paid $3,500 of qualified education expenses in December 2013, and your child began college in January 2014. How to file tax return for 2012 You claimed $3,500 as the tuition and fees deduction on your 2013 income tax return. How to file tax return for 2012 The reduction reduced your taxable income by $3,500. How to file tax return for 2012 Also, you claimed no tax credits in 2013. How to file tax return for 2012 Your child withdrew from two classes and you received a refund of $2,000 in 2014 after you filed your 2013 tax return. How to file tax return for 2012 Refigure your 2013 tuition and fees deduction using $1,500 of qualified education expense instead of the $3,500. How to file tax return for 2012 The refigured tuition and fees deduction is $1,500. How to file tax return for 2012 Do not file an amended 2013 tax return to account for this adjustment. How to file tax return for 2012 Instead, include the difference of $2,000 (but only to the extent this difference would have increased your 2013 tax) on the “Other income” line of your 2014 Form 1040. How to file tax return for 2012 You cannot file Form 1040A for 2014. How to file tax return for 2012 Amounts that do not reduce qualified education expenses. How to file tax return for 2012   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. How to file tax return for 2012   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. How to file tax return for 2012 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 Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Restrictions. How to file tax return for 2012 The use of the money is not restricted. How to file tax return for 2012 Example 1. How to file tax return for 2012 In 2013, Jackie paid $3,000 for tuition and $5,000 for room and board at University X. How to file tax return for 2012 The university did not require her to pay any fees in addition to her tuition in order to enroll in or attend classes. How to file tax return for 2012 To help pay these costs, she was awarded a $2,000 scholarship and a $4,000 student loan. How to file tax return for 2012 The terms of the scholarship state that it can be used to pay any of Jackie's college expenses. How to file tax return for 2012 University X applies the $2,000 scholarship against Jackie's $8,000 total bill, and Jackie pays the $6,000 balance of her bill from University X with a combination of her student loan and her savings. How to file tax return for 2012 Jackie does not report any portion of the scholarship as income on her tax return. How to file tax return for 2012 In figuring the tuition and fees deduction, Jackie must reduce her qualified education expenses by the amount of the scholarship ($2,000) because she excluded the entire scholarship from her income. How to file tax return for 2012 The student loan is not tax-free educational assistance, so she does not need to reduce her qualified expenses by any part of the loan proceeds. How to file tax return for 2012 Jackie is treated as having paid $1,000 in qualified education expenses ($3,000 tuition – $2,000 scholarship) in 2013. How to file tax return for 2012 Example 2. How to file tax return for 2012 The facts are the same as in Example 1, except that Jackie reports her entire scholarship as income on her tax return. How to file tax return for 2012 Because Jackie reported the entire $2,000 scholarship in her income, she does not need to reduce her qualified education expenses. How to file tax return for 2012 Jackie is treated as having paid $3,000 in qualified education expenses. How to file tax return for 2012 Expenses That Do Not Qualify Qualified education expenses do not include amounts paid for: Insurance, Medical expenses (including student health fees), Room and board, Transportation, or Similar personal, living, or family expenses. How to file tax return for 2012 This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. How to file tax return for 2012 Sports, games, hobbies, and noncredit courses. How to file tax return for 2012   Qualified education expenses generally do not include expenses that relate to any course of instruction or other education that involves sports, games or hobbies, or any noncredit course. How to file tax return for 2012 However, if the course of instruction or other education is part of the student's degree program, these expenses can qualify. How to file tax return for 2012 Comprehensive or bundled fees. How to file tax return for 2012   Some eligible educational institutions combine all of their fees for an academic period into one amount. How to file tax return for 2012 If you do not receive, or do not have access to, an allocation showing how much you paid for qualified education expenses and how much you paid for personal expenses, such as those listed above, contact the institution. How to file tax return for 2012 The institution is required to make this allocation and provide you with the amount you paid (or were billed) for qualified education expenses on Form 1098-T. How to file tax return for 2012 See Figuring the Deduction , later, for more information about Form 1098-T. How to file tax return for 2012 Who Is an Eligible Student For purposes of the tuition and fees deduction, an eligible student is a student who is enrolled in one or more courses at an eligible educational institution (as defined under Qualified Education Expenses , earlier). How to file tax return for 2012 Who Can Claim a Dependent's Expenses Generally, in order to claim the tuition and fees deduction for qualified education expenses for a dependent, you must: Have paid the expenses, and Claim an exemption for the student as a dependent. How to file tax return for 2012 For you to be able to deduct qualified education expenses for your dependent, you must claim an exemption for that individual. How to file tax return for 2012 You do this by listing your dependent's name and other required information on Form 1040 (or Form 1040A), line 6c. How to file tax return for 2012 IF your dependent is an eligible student and you. How to file tax return for 2012 . How to file tax return for 2012 . How to file tax return for 2012 AND. How to file tax return for 2012 . How to file tax return for 2012 . How to file tax return for 2012 THEN. How to file tax return for 2012 . How to file tax return for 2012 . How to file tax return for 2012 claim an exemption for your dependent you paid all qualified education expenses for your dependent only you can deduct the qualified education expenses that you paid. How to file tax return for 2012 Your dependent cannot take a deduction. How to file tax return for 2012 claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. How to file tax return for 2012 do not claim an exemption for your dependent you paid all qualified education expenses no one is allowed to take a deduction. How to file tax return for 2012 do not claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. How to file tax return for 2012 Expenses paid by dependent. How to file tax return for 2012   If your dependent pays qualified education expenses, no one can take a tuition and fees deduction for those expenses. How to file tax return for 2012 Neither you nor your dependent can deduct the expenses. How to file tax return for 2012 For purposes of the tuition and fees deduction, you are not treated as paying any expenses actually paid by a dependent for whom you or anyone other than the dependent can claim an exemption. How to file tax return for 2012 This rule applies even if you do not claim an exemption for your dependent on your tax return. How to file tax return for 2012 Expenses paid by you. How to file tax return for 2012   If you claim an exemption for a dependent who is an eligible student, only you can include any expenses you paid when figuring your tuition and fees deduction. How to file tax return for 2012 Expenses paid under divorce decree. How to file tax return for 2012   Qualified education expenses paid directly to an eligible educational institution for a student under a court-approved divorce decree are treated as paid by the student. How to file tax return for 2012 Only the student would be eligible to take a tuition and fees deduction for that payment, and then only if no one else could claim an exemption for the student. How to file tax return for 2012 Expenses paid by others. How to file tax return for 2012   Someone other than you, your spouse, or your dependent (such as a relative or former spouse) may make a payment directly to an eligible educational institution to pay for an eligible student's qualified education expenses. How to file tax return for 2012 In this case, the student is treated as receiving the payment from the other person and, in turn, paying the institution. How to file tax return for 2012 If you claim, or can claim, an exemption on your tax return for the student, you are not considered to have paid the expenses and you cannot deduct them. How to file tax return for 2012 If the student is not a dependent, only the student can deduct payments made directly to the institution for his or her expenses. How to file tax return for 2012 If the student is your dependent, no one can deduct the payments. How to file tax return for 2012 Example. How to file tax return for 2012 In 2013, Ms. How to file tax return for 2012 Baker makes a payment directly to an eligible educational institution for her grandson Dan's qualified education expenses. How to file tax return for 2012 For purposes of deducting tuition and fees, Dan is treated as receiving the money from his grandmother and, in turn, paying his own qualified education expenses. How to file tax return for 2012 If an exemption cannot be claimed for Dan on anyone else's tax return, only Dan can claim a tuition and fees deduction for his grandmother's payment. How to file tax return for 2012 If someone else can claim an exemption for Dan, no one will be allowed a deduction for Ms. How to file tax return for 2012 Baker's payment. How to file tax return for 2012 Tuition reduction. How to file tax return for 2012   When an eligible educational institution provides a reduction in tuition to an employee of the institution (or spouse or dependent child of an employee), the amount of the reduction may or may not be taxable. How to file tax return for 2012 If it is taxable, the employee is treated as receiving a payment of that amount and, in turn, paying it to the educational institution on behalf of the student. How to file tax return for 2012 For more information on tuition reductions, see Qualified Tuition Reduction , in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. How to file tax return for 2012 Figuring the Deduction The maximum tuition and fees deduction in 2013 is $4,000, $2,000, or $0, depending on the amount of your MAGI. How to file tax return for 2012 See Effect of the Amount of Your Income on the Amount of Your Deduction , later. How to file tax return for 2012 Form 1098-T. How to file tax return for 2012   To help you figure your tuition and fees deduction, the student should receive Form 1098-T (see Appendix A for a completed example of Form 1098-T). How to file tax return for 2012 Generally, an eligible educational institution (such as a college or university) must send Form 1098-T (or acceptable substitute) to each enrolled student by January 31, 2014. How to file tax return for 2012 An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. How to file tax return for 2012 However, the amount in boxes 1 and 2 of Form 1098-T might be different than what you paid. How to file tax return for 2012 When figuring the deduction, use only the amounts you paid in 2013 for qualified education expenses. How to file tax return for 2012   In addition, Form 1098-T should give other information for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements or refunds, and whether the student was enrolled at least half-time or was a graduate student. How to file tax return for 2012    The eligible educational institution may ask for a completed Form W-9S or similar statement to obtain the student's name, address, and taxpayer identification number. How to file tax return for 2012 Effect of the Amount of Your Income on the Amount of Your Deduction If your MAGI is not more than $65,000 ($130,000 if you are married filing jointly), your maximum tuition and fees deduction is $4,000. How to file tax return for 2012 If your MAGI is larger than $65,000 ($130,000 if you are married filing jointly), but is not more than $80,000 ($160,000 if you are married filing jointly), your maximum deduction is $2,000. How to file tax return for 2012 No tuition and fees deduction is allowed if your MAGI is larger than $80,000 ($160,000 if you are married filing jointly). How to file tax return for 2012 Modified adjusted gross income (MAGI). How to file tax return for 2012   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return before subtracting any deduction for tuition and fees. How to file tax return for 2012 However, as discussed below, there may be other modifications. How to file tax return for 2012 MAGI when using Form 1040A. How to file tax return for 2012   If you file Form 1040A, your MAGI is the AGI on line 22 of that form, figured without taking into account any amount on line 19 (tuition and fees deduction). How to file tax return for 2012 MAGI when using Form 1040. How to file tax return for 2012   If you file Form 1040, your MAGI is the AGI on line 38 of that form, figured without taking into account any amount on line 34 (tuition and fees deduction) or line 35 (domestic production activities deduction), and modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. How to file tax return for 2012   Table 6-2 shows how the amount of your MAGI can affect your tuition and fees deduction. How to file tax return for 2012   You can use Worksheet 6-1. How to file tax return for 2012 MAGI for the Tuition and Fees Deduction , later, to figure your MAGI. How to file tax return for 2012 Table 6-2. How to file tax return for 2012 Effect of MAGI on Maximum Tuition and Fees Deduction IF your filing status is. How to file tax return for 2012 . How to file tax return for 2012 . How to file tax return for 2012 AND your MAGI is. How to file tax return for 2012 . How to file tax return for 2012 . How to file tax return for 2012 THEN your maximum tuition and fees deduction is. How to file tax return for 2012 . How to file tax return for 2012 . How to file tax return for 2012 single,  head of household, or qualifying widow(er) not more than $65,000 $4,000. How to file tax return for 2012 more than $65,000  but not more than $80,000 $2,000. How to file tax return for 2012 more than $80,000 $0. How to file tax return for 2012 married filing joint return not more than $130,000 $4,000. How to file tax return for 2012 more than $130,000 but not more than $160,000 $2,000. How to file tax return for 2012 more than $160,000 $0. How to file tax return for 2012 Claiming the Deduction You claim a tuition and fees deduction by completing Form 8917 and submitting it with your Form 1040 or Form 1040A. How to file tax return for 2012 Enter the deduction on Form 1040, line 34, or Form 1040A, line 19. How to file tax return for 2012 A filled-in Form 8917 is shown at the end of this chapter. How to file tax return for 2012 Illustrated Example Tim Pfister, a single taxpayer, enrolled full-time at a local college to earn a degree in engineering. How to file tax return for 2012 This is the first year of his postsecondary education. How to file tax return for 2012 During 2013, he paid $3,600 for his qualified 2013 tuition expense. How to file tax return for 2012 Both he and the college meet all of the requirements for the tuition and fees deduction. How to file tax return for 2012 Tim's total income (Form 1040, line 22) and MAGI are $26,000. How to file tax return for 2012 He figures his deduction of $3,600 as shown on Form 8917, later. How to file tax return for 2012 Worksheet 6-1. How to file tax return for 2012 MAGI for the Tuition and Fees Deduction Use this worksheet if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico. How to file tax return for 2012 Before using this worksheet, you must complete Form 1040, lines 7 through 33, and figure any amount to be entered on the dotted line next to line 36. How to file tax return for 2012 1. How to file tax return for 2012 Enter the amount from Form 1040, line 22   1. How to file tax return for 2012         2. How to file tax return for 2012 Enter the total from Form 1040, lines 23 through 33   2. How to file tax return for 2012               3. How to file tax return for 2012 Enter the total of any amounts entered on the dotted line next to Form 1040, line 36   3. How to file tax return for 2012               4. How to file tax return for 2012 Add lines 2 and 3   4. How to file tax return for 2012         5. How to file tax return for 2012 Subtract line 4 from line 1   5. How to file tax return for 2012         6. How to file tax return for 2012 Enter your foreign earned income exclusion and/or housing  exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   6. How to file tax return for 2012         7. How to file tax return for 2012 Enter your foreign housing deduction (Form 2555, line 50)   7. How to file tax return for 2012         8. How to file tax return for 2012 Enter the amount of income from Puerto Rico you are excluding   8. How to file tax return for 2012         9. How to file tax return for 2012 Enter the amount of income from American Samoa you are  excluding (Form 4563, line 15)   9. How to file tax return for 2012         10. How to file tax return for 2012 Add lines 5 through 9. How to file tax return for 2012 This is your modified adjusted gross income   10. How to file tax return for 2012     Note. How to file tax return for 2012 If the amount on line 10 is more than $80,000 ($160,000 if married filing jointly),  you cannot take the deduction for tuition and fees. How to file tax return for 2012       This image is too large to be displayed in the current screen. How to file tax return for 2012 Please click the link to view the image. How to file tax return for 2012 Form 8917 for Tim Pfister Prev  Up  Next   Home   More Online Publications