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Irs 1040 Ez 2012

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Irs 1040 Ez 2012

Irs 1040 ez 2012 12. Irs 1040 ez 2012   Other Income Table of Contents Introduction Useful Items - You may want to see: Bartering Canceled DebtsInterest included in canceled debt. Irs 1040 ez 2012 Exceptions Host or Hostess Life Insurance ProceedsSurviving spouse. Irs 1040 ez 2012 Endowment Contract Proceeds Accelerated Death Benefits Public Safety Officer Killed in the Line of Duty Partnership Income S Corporation Income RecoveriesItemized Deduction Recoveries Rents from Personal Property RepaymentsMethod 1. Irs 1040 ez 2012 Method 2. Irs 1040 ez 2012 RoyaltiesDepletion. Irs 1040 ez 2012 Coal and iron ore. Irs 1040 ez 2012 Sale of property interest. Irs 1040 ez 2012 Part of future production sold. Irs 1040 ez 2012 Unemployment BenefitsTypes of unemployment compensation. Irs 1040 ez 2012 Governmental program. Irs 1040 ez 2012 Repayment of unemployment compensation. Irs 1040 ez 2012 Tax withholding. Irs 1040 ez 2012 Repayment of benefits. Irs 1040 ez 2012 Welfare and Other Public Assistance Benefits Other IncomeEmotional distress. Irs 1040 ez 2012 Deduction for costs involved in unlawful discrimination suits. Irs 1040 ez 2012 Energy conservation measure. Irs 1040 ez 2012 Dwelling unit. Irs 1040 ez 2012 Current income required to be distributed. Irs 1040 ez 2012 Current income not required to be distributed. Irs 1040 ez 2012 How to report. Irs 1040 ez 2012 Losses. Irs 1040 ez 2012 Grantor trust. Irs 1040 ez 2012 Nonemployee compensation. Irs 1040 ez 2012 Corporate director. Irs 1040 ez 2012 Personal representatives. Irs 1040 ez 2012 Manager of trade or business for bankruptcy estate. Irs 1040 ez 2012 Notary public. Irs 1040 ez 2012 Election precinct official. Irs 1040 ez 2012 Difficulty-of-care payments. Irs 1040 ez 2012 Maintaining space in home. Irs 1040 ez 2012 Reporting taxable payments. Irs 1040 ez 2012 Lotteries and raffles. Irs 1040 ez 2012 Form W-2G. Irs 1040 ez 2012 Reporting winnings and recordkeeping. Irs 1040 ez 2012 Inherited pension or IRA. Irs 1040 ez 2012 Employee awards or bonuses. Irs 1040 ez 2012 Pulitzer, Nobel, and similar prizes. Irs 1040 ez 2012 Payment for services. Irs 1040 ez 2012 VA payments. Irs 1040 ez 2012 Prizes. Irs 1040 ez 2012 Strike and lockout benefits. Irs 1040 ez 2012 Introduction You must include on your return all items of income you receive in the form of money, property, and services unless the tax law states that you do not include them. Irs 1040 ez 2012 Some items, however, are only partly excluded from income. Irs 1040 ez 2012 This chapter discusses many kinds of income and explains whether they are taxable or nontaxable. Irs 1040 ez 2012 Income that is taxable must be reported on your tax return and is subject to tax. Irs 1040 ez 2012 Income that is nontaxable may have to be shown on your tax return but is not taxable. Irs 1040 ez 2012 This chapter begins with discussions of the following income items. Irs 1040 ez 2012 Bartering. Irs 1040 ez 2012 Canceled debts. Irs 1040 ez 2012 Sales parties at which you are the host or hostess. Irs 1040 ez 2012 Life insurance proceeds. Irs 1040 ez 2012 Partnership income. Irs 1040 ez 2012 S Corporation income. Irs 1040 ez 2012 Recoveries (including state income tax refunds). Irs 1040 ez 2012 Rents from personal property. Irs 1040 ez 2012 Repayments. Irs 1040 ez 2012 Royalties. Irs 1040 ez 2012 Unemployment benefits. Irs 1040 ez 2012 Welfare and other public assistance benefits. Irs 1040 ez 2012 These discussions are followed by brief discussions of other income items. Irs 1040 ez 2012 Useful Items - You may want to see: Publication 525 Taxable and Nontaxable Income 544 Sales and Other Dispositions of Assets 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments Bartering Bartering is an exchange of property or services. Irs 1040 ez 2012 You must include in your income, at the time received, the fair market value of property or services you receive in bartering. Irs 1040 ez 2012 If you exchange services with another person and you both have agreed ahead of time on the value of the services, that value will be accepted as fair market value unless the value can be shown to be otherwise. Irs 1040 ez 2012 Generally, you report this income on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Irs 1040 ez 2012 However, if the barter involves an exchange of something other than services, such as in Example 3 below, you may have to use another form or schedule instead. Irs 1040 ez 2012 Example 1. Irs 1040 ez 2012 You are a self-employed attorney who performs legal services for a client, a small corporation. Irs 1040 ez 2012 The corporation gives you shares of its stock as payment for your services. Irs 1040 ez 2012 You must include the fair market value of the shares in your income on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) in the year you receive them. Irs 1040 ez 2012 Example 2. Irs 1040 ez 2012 You are self-employed and a member of a barter club. Irs 1040 ez 2012 The club uses “credit units” as a means of exchange. Irs 1040 ez 2012 It adds credit units to your account for goods or services you provide to members, which you can use to purchase goods or services offered by other members of the barter club. Irs 1040 ez 2012 The club subtracts credit units from your account when you receive goods or services from other members. Irs 1040 ez 2012 You must include in your income the value of the credit units that are added to your account, even though you may not actually receive goods or services from other members until a later tax year. Irs 1040 ez 2012 Example 3. Irs 1040 ez 2012 You own a small apartment building. Irs 1040 ez 2012 In return for 6 months rent-free use of an apartment, an artist gives you a work of art she created. Irs 1040 ez 2012 You must report as rental income on Schedule E (Form 1040), Supplemental Income and Loss, the fair market value of the artwork, and the artist must report as income on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) the fair rental value of the apartment. Irs 1040 ez 2012 Form 1099-B from barter exchange. Irs 1040 ez 2012   If you exchanged property or services through a barter exchange, Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or a similar statement from the barter exchange should be sent to you by February 18, 2014. Irs 1040 ez 2012 It should show the value of cash, property, services, credits, or scrip you received from exchanges during 2013. Irs 1040 ez 2012 The IRS also will receive a copy of Form 1099-B. Irs 1040 ez 2012 Canceled Debts In most cases, if a debt you owe is canceled or forgiven, other than as a gift or bequest, you must include the canceled amount in your income. Irs 1040 ez 2012 You have no income from the canceled debt if it is intended as a gift to you. Irs 1040 ez 2012 A debt includes any indebtedness for which you are liable or which attaches to property you hold. Irs 1040 ez 2012 If the debt is a nonbusiness debt, report the canceled amount on Form 1040, line 21. Irs 1040 ez 2012 If it is a business debt, report the amount on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) (or on Schedule F (Form 1040), Profit or Loss From Farming, if the debt is farm debt and you are a farmer). Irs 1040 ez 2012 Form 1099-C. Irs 1040 ez 2012   If a Federal Government agency, financial institution, or credit union cancels or forgives a debt you owe of $600 or more, you will receive a Form 1099-C, Cancellation of Debt. Irs 1040 ez 2012 The amount of the canceled debt is shown in box 2. Irs 1040 ez 2012 Interest included in canceled debt. Irs 1040 ez 2012   If any interest is forgiven and included in the amount of canceled debt in box 2, the amount of interest also will be shown in box 3. Irs 1040 ez 2012 Whether or not you must include the interest portion of the canceled debt in your income depends on whether the interest would be deductible when you paid it. Irs 1040 ez 2012 See Deductible debt under Exceptions, later. Irs 1040 ez 2012   If the interest would not be deductible (such as interest on a personal loan), include in your income the amount from Form 1099-C, box 2. Irs 1040 ez 2012 If the interest would be deductible (such as on a business loan), include in your income the net amount of the canceled debt (the amount shown in box 2 less the interest amount shown in box 3). Irs 1040 ez 2012 Discounted mortgage loan. Irs 1040 ez 2012   If your financial institution offers a discount for the early payment of your mortgage loan, the amount of the discount is canceled debt. Irs 1040 ez 2012 You must include the canceled amount in your income. Irs 1040 ez 2012 Mortgage relief upon sale or other disposition. Irs 1040 ez 2012   If you are personally liable for a mortgage (recourse debt), and you are relieved of the mortgage when you dispose of the property, you may realize gain or loss up to the fair market value of the property. Irs 1040 ez 2012 To the extent the mortgage discharge exceeds the fair market value of the property, it is income from discharge of indebtedness unless it qualifies for exclusion under Excluded debt , later. Irs 1040 ez 2012 Report any income from discharge of indebtedness on nonbusiness debt that does not qualify for exclusion as other income on Form 1040, line 21. Irs 1040 ez 2012    You may be able to exclude part of the mortgage relief on your principal residence. Irs 1040 ez 2012 See Excluded debt, later. Irs 1040 ez 2012   If you are not personally liable for a mortgage (nonrecourse debt), and you are relieved of the mortgage when you dispose of the property (such as through foreclosure), that relief is included in the amount you realize. Irs 1040 ez 2012 You may have a taxable gain if the amount you realize exceeds your adjusted basis in the property. Irs 1040 ez 2012 Report any gain on nonbusiness property as a capital gain. Irs 1040 ez 2012   See Publication 4681 for more information. Irs 1040 ez 2012 Stockholder debt. Irs 1040 ez 2012   If you are a stockholder in a corporation and the corporation cancels or forgives your debt to it, the canceled debt is a constructive distribution that is generally dividend income to you. Irs 1040 ez 2012 For more information, see Publication 542, Corporations. Irs 1040 ez 2012   If you are a stockholder in a corporation and you cancel a debt owed to you by the corporation, you generally do not realize income. Irs 1040 ez 2012 This is because the canceled debt is considered as a contribution to the capital of the corporation equal to the amount of debt principal that you canceled. Irs 1040 ez 2012 Repayment of canceled debt. Irs 1040 ez 2012   If you included a canceled amount in your income and later pay the debt, you may be able to file a claim for refund for the year the amount was included in income. Irs 1040 ez 2012 You can file a claim on Form 1040X if the statute of limitations for filing a claim is still open. Irs 1040 ez 2012 The statute of limitations generally does not end until 3 years after the due date of your original return. Irs 1040 ez 2012 Exceptions There are several exceptions to the inclusion of canceled debt in income. Irs 1040 ez 2012 These are explained next. Irs 1040 ez 2012 Student loans. Irs 1040 ez 2012   Certain student loans contain a provision that all or part of the debt incurred to attend the qualified educational institution will be canceled if you work for a certain period of time in certain professions for any of a broad class of employers. Irs 1040 ez 2012   You do not have income if your student loan is canceled after you agreed to this provision and then performed the services required. Irs 1040 ez 2012 To qualify, the loan must have been made by: The Federal Government, a state or local government, or an instrumentality, agency, or subdivision thereof, A tax-exempt public benefit corporation that has assumed control of a state, county, or municipal hospital, and whose employees are considered public employees under state law, or An educational institution: Under an agreement with an entity described in (1) or (2) that provided the funds to the institution to make the loan, or As part of a program of the institution designed to encourage its students to serve in occupations with unmet needs or in areas with unmet needs and under which the services provided by the students (or former students) are for or under the direction of a governmental unit or a tax-exempt organization described in section 501(c)(3). Irs 1040 ez 2012   A loan to refinance a qualified student loan also will qualify if it was made by an educational institution or a qualified tax-exempt organization under its program designed as described in (3)(b) above. Irs 1040 ez 2012 Education loan repayment assistance. Irs 1040 ez 2012   Education loan repayments made to you by the National Health Service Corps Loan Repayment Program (NHSC Loan Repayment Program), a state education loan repayment program eligible for funds under the Public Health Service Act, or any other state loan repayment or loan forgiveness program that is intended to provide for the increased availability of health services in underserved or health professional shortage areas are not taxable. Irs 1040 ez 2012    The provision relating to the “other state loan repayment or loan forgiveness program” was added to this exclusion for amounts received in tax years beginning after December 31, 2008. Irs 1040 ez 2012 If you included these amounts in income in 2010, 2011, or 2012, you should file an amended tax return to exclude this income. Irs 1040 ez 2012 See Form 1040X and its instructions for details on filing. Irs 1040 ez 2012 Deductible debt. Irs 1040 ez 2012   You do not have income from the cancellation of a debt if your payment of the debt would be deductible. Irs 1040 ez 2012 This exception applies only if you use the cash method of accounting. Irs 1040 ez 2012 For more information, see chapter 5 of Publication 334, Tax Guide for Small Business. Irs 1040 ez 2012 Price reduced after purchase. Irs 1040 ez 2012   In most cases, if the seller reduces the amount of debt you owe for property you purchased, you do not have income from the reduction. Irs 1040 ez 2012 The reduction of the debt is treated as a purchase price adjustment and reduces your basis in the property. Irs 1040 ez 2012 Excluded debt. Irs 1040 ez 2012   Do not include a canceled debt in your gross income in the following situations. Irs 1040 ez 2012 The debt is canceled in a bankruptcy case under title 11 of the U. Irs 1040 ez 2012 S. Irs 1040 ez 2012 Code. Irs 1040 ez 2012 See Publication 908, Bankruptcy Tax Guide. Irs 1040 ez 2012 The debt is canceled when you are insolvent. Irs 1040 ez 2012 However, you cannot exclude any amount of canceled debt that is more than the amount by which you are insolvent. Irs 1040 ez 2012 See Publication 908. Irs 1040 ez 2012 The debt is qualified farm debt and is canceled by a qualified person. Irs 1040 ez 2012 See chapter 3 of Publication 225, Farmer's Tax Guide. Irs 1040 ez 2012 The debt is qualified real property business debt. Irs 1040 ez 2012 See chapter 5 of Publication 334. Irs 1040 ez 2012 The cancellation is intended as a gift. Irs 1040 ez 2012 The debt is qualified principal residence indebtedness. Irs 1040 ez 2012 See Publication 525 for additional information. Irs 1040 ez 2012 Host or Hostess If you host a party or event at which sales are made, any gift or gratuity you receive for giving the event is a payment for helping a direct seller make sales. Irs 1040 ez 2012 You must report this item as income at its fair market value. Irs 1040 ez 2012 Your out-of-pocket party expenses are subject to the 50% limit for meal and entertainment expenses. Irs 1040 ez 2012 These expenses are deductible as miscellaneous itemized deductions subject to the 2%-of-AGI limit on Schedule A (Form 1040), but only up to the amount of income you receive for giving the party. Irs 1040 ez 2012 For more information about the 50% limit for meal and entertainment expenses, see chapter 26. Irs 1040 ez 2012 Life Insurance Proceeds Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. Irs 1040 ez 2012 This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. Irs 1040 ez 2012 However, interest income received as a result of life insurance proceeds may be taxable. Irs 1040 ez 2012 Proceeds not received in installments. Irs 1040 ez 2012   If death benefits are paid to you in a lump sum or other than at regular intervals, include in your income only the benefits that are more than the amount payable to you at the time of the insured person's death. Irs 1040 ez 2012 If the benefit payable at death is not specified, you include in your income the benefit payments that are more than the present value of the payments at the time of death. Irs 1040 ez 2012 Proceeds received in installments. Irs 1040 ez 2012   If you receive life insurance proceeds in installments, you can exclude part of each installment from your income. Irs 1040 ez 2012   To determine the excluded part, divide the amount held by the insurance company (generally the total lump sum payable at the death of the insured person) by the number of installments to be paid. Irs 1040 ez 2012 Include anything over this excluded part in your income as interest. Irs 1040 ez 2012 Surviving spouse. Irs 1040 ez 2012   If your spouse died before October 23, 1986, and insurance proceeds paid to you because of the death of your spouse are received in installments, you can exclude up to $1,000 a year of the interest included in the installments. Irs 1040 ez 2012 If you remarry, you can continue to take the exclusion. Irs 1040 ez 2012 Surrender of policy for cash. Irs 1040 ez 2012   If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Irs 1040 ez 2012 In most cases, your cost (or investment in the contract) is the total of premiums that you paid for the life insurance policy, less any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income. Irs 1040 ez 2012    You should receive a Form 1099-R showing the total proceeds and the taxable part. Irs 1040 ez 2012 Report these amounts on lines 16a and 16b of Form 1040 or lines 12a and 12b of Form 1040A. Irs 1040 ez 2012 More information. Irs 1040 ez 2012   For more information, see Life Insurance Proceeds in Publication 525. Irs 1040 ez 2012 Endowment Contract Proceeds An endowment contract is a policy under which you are paid a specified amount of money on a certain date unless you die before that date, in which case, the money is paid to your designated beneficiary. Irs 1040 ez 2012 Endowment proceeds paid in a lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. Irs 1040 ez 2012 To determine your cost, subtract any amount that you previously received under the contract and excluded from your income from the total premiums (or other consideration) paid for the contract. Irs 1040 ez 2012 Include the part of the lump sum payment that is more than your cost in your income. Irs 1040 ez 2012 Accelerated Death Benefits Certain amounts paid as accelerated death benefits under a life insurance contract or viatical settlement before the insured's death are excluded from income if the insured is terminally or chronically ill. Irs 1040 ez 2012 Viatical settlement. Irs 1040 ez 2012   This is the sale or assignment of any part of the death benefit under a life insurance contract to a viatical settlement provider. Irs 1040 ez 2012 A viatical settlement provider is a person who regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured individuals who are terminally or chronically ill and who meets the requirements of section 101(g)(2)(B) of the Internal Revenue Code. Irs 1040 ez 2012 Exclusion for terminal illness. Irs 1040 ez 2012    Accelerated death benefits are fully excludable if the insured is a terminally ill individual. Irs 1040 ez 2012 This is a person who has been certified by a physician as having an illness or physical condition that can reasonably be expected to result in death within 24 months from the date of the certification. Irs 1040 ez 2012 Exclusion for chronic illness. Irs 1040 ez 2012    If the insured is a chronically ill individual who is not terminally ill, accelerated death benefits paid on the basis of costs incurred for qualified long-term care services are fully excludable. Irs 1040 ez 2012 Accelerated death benefits paid on a per diem or other periodic basis are excludable up to a limit. Irs 1040 ez 2012 This limit applies to the total of the accelerated death benefits and any periodic payments received from long-term care insurance contracts. Irs 1040 ez 2012 For information on the limit and the definitions of chronically ill individual, qualified long-term care services, and long-term care insurance contracts, see Long-Term Care Insurance Contracts under Sickness and Injury Benefits in Publication 525. Irs 1040 ez 2012 Exception. Irs 1040 ez 2012   The exclusion does not apply to any amount paid to a person (other than the insured) who has an insurable interest in the life of the insured because the insured: Is a director, officer, or employee of the person, or Has a financial interest in the person's business. Irs 1040 ez 2012 Form 8853. Irs 1040 ez 2012   To claim an exclusion for accelerated death benefits made on a per diem or other periodic basis, you must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your return. Irs 1040 ez 2012 You do not have to file Form 8853 to exclude accelerated death benefits paid on the basis of actual expenses incurred. Irs 1040 ez 2012 Public Safety Officer Killed in the Line of Duty If you are a survivor of a public safety officer who was killed in the line of duty, you may be able to exclude from income certain amounts you receive. Irs 1040 ez 2012 For this purpose, the term public safety officer includes law enforcement officers, firefighters, chaplains, and rescue squad and ambulance crew members. Irs 1040 ez 2012 For more information, see Publication 559, Survivors, Executors, and Administrators. Irs 1040 ez 2012 Partnership Income A partnership generally is not a taxable entity. Irs 1040 ez 2012 The income, gains, losses, deductions, and credits of a partnership are passed through to the partners based on each partner's distributive share of these items. Irs 1040 ez 2012 Schedule K-1 (Form 1065). Irs 1040 ez 2012    Although a partnership generally pays no tax, it must file an information return on Form 1065, U. Irs 1040 ez 2012 S. Irs 1040 ez 2012 Return of Partnership Income, and send Schedule K-1 (Form 1065) to each partner. Irs 1040 ez 2012 In addition, the partnership will send each partner a copy of the Partner's Instructions for Schedule K-1 (Form 1065) to help each partner report his or her share of the partnership's income, deductions, credits, and tax preference items. Irs 1040 ez 2012 Keep Schedule K-1 (Form 1065) for your records. Irs 1040 ez 2012 Do not attach it to your Form 1040, unless you are specifically required to do so. Irs 1040 ez 2012 For more information on partnerships, see Publication 541, Partnerships. Irs 1040 ez 2012 Qualified joint venture. Irs 1040 ez 2012   If you and your spouse each materially participate as the only members of a jointly owned and operated business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership. Irs 1040 ez 2012 To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. Irs 1040 ez 2012 For further information on how to make the election and which schedule(s) to file, see the instructions for your individual tax return. Irs 1040 ez 2012 S Corporation Income In most cases, an S corporation does not pay tax on its income. Irs 1040 ez 2012 Instead, the income, losses, deductions, and credits of the corporation are passed through to the shareholders based on each shareholder's pro rata share. Irs 1040 ez 2012 Schedule K-1 (Form 1120S). Irs 1040 ez 2012   An S corporation must file a return on Form 1120S, U. Irs 1040 ez 2012 S. Irs 1040 ez 2012 Income Tax Return for an S Corporation, and send Schedule K-1 (Form 1120S) to each shareholder. Irs 1040 ez 2012 In addition, the S corporation will send each shareholder a copy of the Shareholder's Instructions for Schedule K-1 (Form 1120S) to help each shareholder report his or her share of the S corporation's income, losses, credits, and deductions. Irs 1040 ez 2012 Keep Schedule K-1 (Form 1120S) for your records. Irs 1040 ez 2012 Do not attach it to your Form 1040, unless you are specifically required to do so. Irs 1040 ez 2012 For more information on S corporations and their shareholders, see the Instructions for Form 1120S. Irs 1040 ez 2012 Recoveries A recovery is a return of an amount you deducted or took a credit for in an earlier year. Irs 1040 ez 2012 The most common recoveries are refunds, reimbursements, and rebates of deductions itemized on Schedule A (Form 1040). Irs 1040 ez 2012 You also may have recoveries of non-itemized deductions (such as payments on previously deducted bad debts) and recoveries of items for which you previously claimed a tax credit. Irs 1040 ez 2012 Tax benefit rule. Irs 1040 ez 2012   You must include a recovery in your income in the year you receive it up to the amount by which the deduction or credit you took for the recovered amount reduced your tax in the earlier year. Irs 1040 ez 2012 For this purpose, any increase to an amount carried over to the current year that resulted from the deduction or credit is considered to have reduced your tax in the earlier year. Irs 1040 ez 2012 For more information, see Publication 525. Irs 1040 ez 2012 Federal income tax refund. Irs 1040 ez 2012   Refunds of federal income taxes are not included in your income because they are never allowed as a deduction from income. Irs 1040 ez 2012 State tax refund. Irs 1040 ez 2012   If you received a state or local income tax refund (or credit or offset) in 2013, you generally must include it in income if you deducted the tax in an earlier year. Irs 1040 ez 2012 The payer should send Form 1099-G, Certain Government Payments, to you by January 31, 2014. Irs 1040 ez 2012 The IRS also will receive a copy of the Form 1099-G. Irs 1040 ez 2012 If you file Form 1040, use the State and Local Income Tax Refund Worksheet in the 2013 Form 1040 instructions for line 10 to figure the amount (if any) to include in your income. Irs 1040 ez 2012 See Publication 525 for when you must use another worksheet. Irs 1040 ez 2012   If you could choose to deduct for a tax year either: State and local income taxes, or State and local general sales taxes, then the maximum refund that you may have to include in income is limited to the excess of the tax you chose to deduct for that year over the tax you did not choose to deduct for that year. Irs 1040 ez 2012 For examples, see Publication 525. Irs 1040 ez 2012 Mortgage interest refund. Irs 1040 ez 2012    If you received a refund or credit in 2013 of mortgage interest paid in an earlier year, the amount should be shown in box 3 of your Form 1098, Mortgage Interest Statement. Irs 1040 ez 2012 Do not subtract the refund amount from the interest you paid in 2013. Irs 1040 ez 2012 You may have to include it in your income under the rules explained in the following discussions. Irs 1040 ez 2012 Interest on recovery. Irs 1040 ez 2012   Interest on any of the amounts you recover must be reported as interest income in the year received. Irs 1040 ez 2012 For example, report any interest you received on state or local income tax refunds on Form 1040, line 8a. Irs 1040 ez 2012 Recovery and expense in same year. Irs 1040 ez 2012   If the refund or other recovery and the expense occur in the same year, the recovery reduces the deduction or credit and is not reported as income. Irs 1040 ez 2012 Recovery for 2 or more years. Irs 1040 ez 2012   If you receive a refund or other recovery that is for amounts you paid in 2 or more separate years, you must allocate, on a pro rata basis, the recovered amount between the years in which you paid it. Irs 1040 ez 2012 This allocation is necessary to determine the amount of recovery from any earlier years and to determine the amount, if any, of your allowable deduction for this item for the current year. Irs 1040 ez 2012 For information on how to compute the allocation, see Recoveries in Publication 525. Irs 1040 ez 2012 Itemized Deduction Recoveries If you recover any amount that you deducted in an earlier year on Schedule A (Form 1040), you generally must include the full amount of the recovery in your income in the year you receive it. Irs 1040 ez 2012 Where to report. Irs 1040 ez 2012   Enter your state or local income tax refund on Form 1040, line 10, and the total of all other recoveries as other income on Form 1040, line 21. Irs 1040 ez 2012 You cannot use Form 1040A or Form 1040EZ. Irs 1040 ez 2012 Standard deduction limit. Irs 1040 ez 2012   You generally are allowed to claim the standard deduction if you do not itemize your deductions. Irs 1040 ez 2012 Only your itemized deductions that are more than your standard deduction are subject to the recovery rule (unless you are required to itemize your deductions). Irs 1040 ez 2012 If your total deductions on the earlier year return were not more than your income for that year, include in your income this year the lesser of: Your recoveries, or The amount by which your itemized deductions exceeded the standard deduction. Irs 1040 ez 2012 Example. Irs 1040 ez 2012 For 2012, you filed a joint return. Irs 1040 ez 2012 Your taxable income was $60,000 and you were not entitled to any tax credits. Irs 1040 ez 2012 Your standard deduction was $11,900, and you had itemized deductions of $14,000. Irs 1040 ez 2012 In 2013, you received the following recoveries for amounts deducted on your 2012 return: Medical expenses $200 State and local income tax refund 400 Refund of mortgage interest 325 Total recoveries $925 None of the recoveries were more than the deductions taken for 2012. Irs 1040 ez 2012 The difference between the state and local income tax you deducted and your local general sales tax was more than $400. Irs 1040 ez 2012 Your total recoveries are less than the amount by which your itemized deductions exceeded the standard deduction ($14,000 − 11,900 = $2,100), so you must include your total recoveries in your income for 2013. Irs 1040 ez 2012 Report the state and local income tax refund of $400 on Form 1040, line 10, and the balance of your recoveries, $525, on Form 1040, line 21. Irs 1040 ez 2012 Standard deduction for earlier years. Irs 1040 ez 2012   To determine if amounts recovered in 2013 must be included in your income, you must know the standard deduction for your filing status for the year the deduction was claimed. Irs 1040 ez 2012 Look in the instructions for your tax return from prior years to locate the standard deduction for the filing status for that prior year. Irs 1040 ez 2012 Example. Irs 1040 ez 2012 You filed a joint return on Form 1040 for 2012 with taxable income of $45,000. Irs 1040 ez 2012 Your itemized deductions were $12,350. Irs 1040 ez 2012 The standard deduction that you could have claimed was $11,900. Irs 1040 ez 2012 In 2013, you recovered $2,100 of your 2012 itemized deductions. Irs 1040 ez 2012 None of the recoveries were more than the actual deductions for 2012. Irs 1040 ez 2012 Include $450 of the recoveries in your 2013 income. Irs 1040 ez 2012 This is the smaller of your recoveries ($2,100) or the amount by which your itemized deductions were more than the standard deduction ($12,350 − $11,900 = $450). Irs 1040 ez 2012 Recovery limited to deduction. Irs 1040 ez 2012   You do not include in your income any amount of your recovery that is more than the amount you deducted in the earlier year. Irs 1040 ez 2012 The amount you include in your income is limited to the smaller of: The amount deducted on Schedule A (Form 1040), or The amount recovered. Irs 1040 ez 2012 Example. Irs 1040 ez 2012 During 2012 you paid $1,700 for medical expenses. Irs 1040 ez 2012 From this amount you subtracted $1,500, which was 7. Irs 1040 ez 2012 5% of your adjusted gross income. Irs 1040 ez 2012 Your actual medical expense deduction was $200. Irs 1040 ez 2012 In 2013, you received a $500 reimbursement from your medical insurance for your 2012 expenses. Irs 1040 ez 2012 The only amount of the $500 reimbursement that must be included in your income for 2013 is $200—the amount actually deducted. Irs 1040 ez 2012 Other recoveries. Irs 1040 ez 2012   See Recoveries in Publication 525 if: You have recoveries of items other than itemized deductions, or You received a recovery for an item for which you claimed a tax credit (other than investment credit or foreign tax credit) in a prior year. Irs 1040 ez 2012 Rents from Personal Property If you rent out personal property, such as equipment or vehicles, how you report your income and expenses is in most cases determined by: Whether or not the rental activity is a business, and Whether or not the rental activity is conducted for profit. Irs 1040 ez 2012 In most cases, if your primary purpose is income or profit and you are involved in the rental activity with continuity and regularity, your rental activity is a business. Irs 1040 ez 2012 See Publication 535, Business Expenses, for details on deducting expenses for both business and not-for-profit activities. Irs 1040 ez 2012 Reporting business income and expenses. Irs 1040 ez 2012    If you are in the business of renting personal property, report your income and expenses on Schedule C or Schedule C-EZ (Form 1040). Irs 1040 ez 2012 The form instructions have information on how to complete them. Irs 1040 ez 2012 Reporting nonbusiness income. Irs 1040 ez 2012   If you are not in the business of renting personal property, report your rental income on Form 1040, line 21. Irs 1040 ez 2012 List the type and amount of the income on the dotted line next to line 21. Irs 1040 ez 2012 Reporting nonbusiness expenses. Irs 1040 ez 2012   If you rent personal property for profit, include your rental expenses in the total amount you enter on Form 1040, line 36. Irs 1040 ez 2012 Also enter the amount and “PPR” on the dotted line next to line 36. Irs 1040 ez 2012   If you do not rent personal property for profit, your deductions are limited and you cannot report a loss to offset other income. Irs 1040 ez 2012 See Activity not for profit , under Other Income, later. Irs 1040 ez 2012 Repayments If you had to repay an amount that you included in your income in an earlier year, you may be able to deduct the amount repaid from your income for the year in which you repaid it. Irs 1040 ez 2012 Or, if the amount you repaid is more than $3,000, you may be able to take a credit against your tax for the year in which you repaid it. Irs 1040 ez 2012 Generally, you can claim a deduction or credit only if the repayment qualifies as an expense or loss incurred in your trade or business or in a for-profit transaction. Irs 1040 ez 2012 Type of deduction. Irs 1040 ez 2012   The type of deduction you are allowed in the year of repayment depends on the type of income you included in the earlier year. Irs 1040 ez 2012 You generally deduct the repayment on the same form or schedule on which you previously reported it as income. Irs 1040 ez 2012 For example, if you reported it as self-employment income, deduct it as a business expense on Schedule C or Schedule C-EZ (Form 1040) or Schedule F (Form 1040). Irs 1040 ez 2012 If you reported it as a capital gain, deduct it as a capital loss as explained in the Instructions for Schedule D (Form 1040). Irs 1040 ez 2012 If you reported it as wages, unemployment compensation, or other nonbusiness income, deduct it as a miscellaneous itemized deduction on Schedule A (Form 1040). Irs 1040 ez 2012 Repaid social security benefits. Irs 1040 ez 2012   If you repaid social security benefits or equivalent railroad retirement benefits, see Repayment of benefits in chapter 11. Irs 1040 ez 2012 Repayment of $3,000 or less. Irs 1040 ez 2012   If the amount you repaid was $3,000 or less, deduct it from your income in the year you repaid it. Irs 1040 ez 2012 If you must deduct it as a miscellaneous itemized deduction, enter it on Schedule A (Form 1040), line 23. Irs 1040 ez 2012 Repayment over $3,000. Irs 1040 ez 2012   If the amount you repaid was more than $3,000, you can deduct the repayment (as explained under Type of deduction , earlier). Irs 1040 ez 2012 However, you can choose instead to take a tax credit for the year of repayment if you included the income under a claim of right. Irs 1040 ez 2012 This means that at the time you included the income, it appeared that you had an unrestricted right to it. Irs 1040 ez 2012 If you qualify for this choice, figure your tax under both methods and compare the results. Irs 1040 ez 2012 Use the method (deduction or credit) that results in less tax. Irs 1040 ez 2012 When determining whether the amount you repaid was more or less than $3,000, consider the total amount being repaid on the return. Irs 1040 ez 2012 Each instance of repayment is not considered separately. Irs 1040 ez 2012 Method 1. Irs 1040 ez 2012   Figure your tax for 2013 claiming a deduction for the repaid amount. Irs 1040 ez 2012 If you must deduct it as a miscellaneous itemized deduction, enter it on Schedule A (Form 1040), line 28. Irs 1040 ez 2012 Method 2. Irs 1040 ez 2012   Figure your tax for 2013 claiming a credit for the repaid amount. Irs 1040 ez 2012 Follow these steps. Irs 1040 ez 2012 Figure your tax for 2013 without deducting the repaid amount. Irs 1040 ez 2012 Refigure your tax from the earlier year without including in income the amount you repaid in 2013. Irs 1040 ez 2012 Subtract the tax in (2) from the tax shown on your return for the earlier year. Irs 1040 ez 2012 This is the credit. Irs 1040 ez 2012 Subtract the answer in (3) from the tax for 2013 figured without the deduction (Step 1). Irs 1040 ez 2012   If method 1 results in less tax, deduct the amount repaid. Irs 1040 ez 2012 If method 2 results in less tax, claim the credit figured in (3) above on Form 1040, line 71, by adding the amount of the credit to any other credits on this line, and entering “I. Irs 1040 ez 2012 R. Irs 1040 ez 2012 C. Irs 1040 ez 2012 1341” in the column to the right of line 71. Irs 1040 ez 2012   An example of this computation can be found in Publication 525. Irs 1040 ez 2012 Repaid wages subject to social security and Medicare taxes. Irs 1040 ez 2012   If you had to repay an amount that you included in your wages or compensation in an earlier year on which social security, Medicare, or tier 1 RRTA taxes were paid, ask your employer to refund the excess amount to you. Irs 1040 ez 2012 If the employer refuses to refund the taxes, ask for a statement indicating the amount of the overcollection to support your claim. Irs 1040 ez 2012 File a claim for refund using Form 843, Claim for Refund and Request for Abatement. Irs 1040 ez 2012 Repaid wages subject to Additional Medicare Tax. Irs 1040 ez 2012   Employers cannot make an adjustment or file a claim for refund for Additional Medicare Tax withholding when there is a repayment of wages received by an employee in a prior year because the employee determines liability for Additional Medicare Tax on the employee's income tax return for the prior year. Irs 1040 ez 2012 If you had to repay an amount that you included in your wages or compensation in an earlier year, and on which Additional Medicare Tax was paid, you may be able to recover the Additional Medicare Tax paid on the amount. Irs 1040 ez 2012 To recover Additional Medicare Tax on the repaid wages or compensation, you must file Form 1040X, Amended U. Irs 1040 ez 2012 S. Irs 1040 ez 2012 Individual Income Tax Return, for the prior year in which the wages or compensation were originally received. Irs 1040 ez 2012 See the Instructions for Form 1040X. Irs 1040 ez 2012 Royalties Royalties from copyrights, patents, and oil, gas, and mineral properties are taxable as ordinary income. Irs 1040 ez 2012 In most cases you report royalties in Part I of Schedule E (Form 1040). Irs 1040 ez 2012 However, if you hold an operating oil, gas, or mineral interest or are in business as a self-employed writer, inventor, artist, etc. Irs 1040 ez 2012 , report your income and expenses on Schedule C or Schedule C-EZ (Form 1040). Irs 1040 ez 2012 Copyrights and patents. Irs 1040 ez 2012   Royalties from copyrights on literary, musical, or artistic works, and similar property, or from patents on inventions, are amounts paid to you for the right to use your work over a specified period of time. Irs 1040 ez 2012 Royalties generally are based on the number of units sold, such as the number of books, tickets to a performance, or machines sold. Irs 1040 ez 2012 Oil, gas, and minerals. Irs 1040 ez 2012   Royalty income from oil, gas, and mineral properties is the amount you receive when natural resources are extracted from your property. Irs 1040 ez 2012 The royalties are based on units, such as barrels, tons, etc. Irs 1040 ez 2012 , and are paid to you by a person or company who leases the property from you. Irs 1040 ez 2012 Depletion. Irs 1040 ez 2012   If you are the owner of an economic interest in mineral deposits or oil and gas wells, you can recover your investment through the depletion allowance. Irs 1040 ez 2012 For information on this subject, see chapter 9 of Publication 535. Irs 1040 ez 2012 Coal and iron ore. Irs 1040 ez 2012   Under certain circumstances, you can treat amounts you receive from the disposal of coal and iron ore as payments from the sale of a capital asset, rather than as royalty income. Irs 1040 ez 2012 For information about gain or loss from the sale of coal and iron ore, see Publication 544. Irs 1040 ez 2012 Sale of property interest. Irs 1040 ez 2012   If you sell your complete interest in oil, gas, or mineral rights, the amount you receive is considered payment for the sale of property used in a trade or business under section 1231, not royalty income. Irs 1040 ez 2012 Under certain circumstances, the sale is subject to capital gain or loss treatment as explained in the Instructions for Schedule D (Form 1040). Irs 1040 ez 2012 For more information on selling section 1231 property, see chapter 3 of Publication 544. Irs 1040 ez 2012   If you retain a royalty, an overriding royalty, or a net profit interest in a mineral property for the life of the property, you have made a lease or a sublease, and any cash you receive for the assignment of other interests in the property is ordinary income subject to a depletion allowance. Irs 1040 ez 2012 Part of future production sold. Irs 1040 ez 2012   If you own mineral property but sell part of the future production, in most cases you treat the money you receive from the buyer at the time of the sale as a loan from the buyer. Irs 1040 ez 2012 Do not include it in your income or take depletion based on it. Irs 1040 ez 2012   When production begins, you include all the proceeds in your income, deduct all the production expenses, and deduct depletion from that amount to arrive at your taxable income from the property. Irs 1040 ez 2012 Unemployment Benefits The tax treatment of unemployment benefits you receive depends on the type of program paying the benefits. Irs 1040 ez 2012 Unemployment compensation. Irs 1040 ez 2012   You must include in income all unemployment compensation you receive. Irs 1040 ez 2012 You should receive a Form 1099-G showing in box 1 the total unemployment compensation paid to you. Irs 1040 ez 2012 In most cases, you enter unemployment compensation on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. Irs 1040 ez 2012 Types of unemployment compensation. Irs 1040 ez 2012   Unemployment compensation generally includes any amount received under an unemployment compensation law of the United States or of a state. Irs 1040 ez 2012 It includes the following benefits. Irs 1040 ez 2012 Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund. Irs 1040 ez 2012 State unemployment insurance benefits. Irs 1040 ez 2012 Railroad unemployment compensation benefits. Irs 1040 ez 2012 Disability payments from a government program paid as a substitute for unemployment compensation. Irs 1040 ez 2012 (Amounts received as workers' compensation for injuries or illness are not unemployment compensation. Irs 1040 ez 2012 See chapter 5 for more information. Irs 1040 ez 2012 ) Trade readjustment allowances under the Trade Act of 1974. Irs 1040 ez 2012 Unemployment assistance under the Disaster Relief and Emergency Assistance Act. Irs 1040 ez 2012 Unemployment assistance under the Airline Deregulation Act of 1974 Program. Irs 1040 ez 2012 Governmental program. Irs 1040 ez 2012   If you contribute to a governmental unemployment compensation program and your contributions are not deductible, amounts you receive under the program are not included as unemployment compensation until you recover your contributions. Irs 1040 ez 2012 If you deducted all of your contributions to the program, the entire amount you receive under the program is included in your income. Irs 1040 ez 2012 Repayment of unemployment compensation. Irs 1040 ez 2012   If you repaid in 2013 unemployment compensation you received in 2013, subtract the amount you repaid from the total amount you received and enter the difference on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. Irs 1040 ez 2012 On the dotted line next to your entry enter “Repaid” and the amount you repaid. Irs 1040 ez 2012 If you repaid unemployment compensation in 2013 that you included in income in an earlier year, you can deduct the amount repaid on Schedule A (Form 1040), line 23, if you itemize deductions. Irs 1040 ez 2012 If the amount is more than $3,000, see Repayments , earlier. Irs 1040 ez 2012 Tax withholding. Irs 1040 ez 2012   You can choose to have federal income tax withheld from your unemployment compensation. Irs 1040 ez 2012 To make this choice, complete Form W-4V, Voluntary Withholding Request, and give it to the paying office. Irs 1040 ez 2012 Tax will be withheld at 10% of your payment. Irs 1040 ez 2012    If you do not choose to have tax withheld from your unemployment compensation, you may be liable for estimated tax. Irs 1040 ez 2012 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Irs 1040 ez 2012 For more information on estimated tax, see chapter 4. Irs 1040 ez 2012 Supplemental unemployment benefits. Irs 1040 ez 2012   Benefits received from an employer-financed fund (to which the employees did not contribute) are not unemployment compensation. Irs 1040 ez 2012 They are taxable as wages and are subject to withholding for income tax. Irs 1040 ez 2012 They may be subject to social security and Medicare taxes. Irs 1040 ez 2012 For more information, see Supplemental Unemployment Benefits in section 5 of Publication 15-A, Employer's Supplemental Tax Guide. Irs 1040 ez 2012 Report these payments on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. Irs 1040 ez 2012 Repayment of benefits. Irs 1040 ez 2012   You may have to repay some of your supplemental unemployment benefits to qualify for trade readjustment allowances under the Trade Act of 1974. Irs 1040 ez 2012 If you repay supplemental unemployment benefits in the same year you receive them, reduce the total benefits by the amount you repay. Irs 1040 ez 2012 If you repay the benefits in a later year, you must include the full amount of the benefits received in your income for the year you received them. Irs 1040 ez 2012   Deduct the repayment in the later year as an adjustment to gross income on Form 1040. Irs 1040 ez 2012 (You cannot use Form 1040A or Form 1040EZ. Irs 1040 ez 2012 ) Include the repayment on Form 1040, line 36, and enter “Sub-Pay TRA” and the amount on the dotted line next to line 36. Irs 1040 ez 2012 If the amount you repay in a later year is more than $3,000, you may be able to take a credit against your tax for the later year instead of deducting the amount repaid. Irs 1040 ez 2012 For more information on this, see Repayments , earlier. Irs 1040 ez 2012 Private unemployment fund. Irs 1040 ez 2012   Unemployment benefit payments from a private (nonunion) fund to which you voluntarily contribute are taxable only if the amounts you receive are more than your total payments into the fund. Irs 1040 ez 2012 Report the taxable amount on Form 1040, line 21. Irs 1040 ez 2012 Payments by a union. Irs 1040 ez 2012   Benefits paid to you as an unemployed member of a union from regular union dues are included in your income on Form 1040, line 21. Irs 1040 ez 2012 However, if you contribute to a special union fund and your payments to the fund are not deductible, the unemployment benefits you receive from the fund are includible in your income only to the extent they are more than your contributions. Irs 1040 ez 2012 Guaranteed annual wage. Irs 1040 ez 2012   Payments you receive from your employer during periods of unemployment, under a union agreement that guarantees you full pay during the year, are taxable as wages. Irs 1040 ez 2012 Include them on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. Irs 1040 ez 2012 State employees. Irs 1040 ez 2012   Payments similar to a state's unemployment compensation may be made by the state to its employees who are not covered by the state's unemployment compensation law. Irs 1040 ez 2012 Although the payments are fully taxable, do not report them as unemployment compensation. Irs 1040 ez 2012 Report these payments on Form 1040, line 21. Irs 1040 ez 2012 Welfare and Other Public Assistance Benefits Do not include in your income governmental benefit payments from a public welfare fund based upon need, such as payments to blind individuals under a state public assistance law. Irs 1040 ez 2012 Payments from a state fund for the victims of crime should not be included in the victims' incomes if they are in the nature of welfare payments. Irs 1040 ez 2012 Do not deduct medical expenses that are reimbursed by such a fund. Irs 1040 ez 2012 You must include in your income any welfare payments that are compensation for services or that are obtained fraudulently. Irs 1040 ez 2012 Reemployment Trade Adjustment Assistance (RTAA) payments. Irs 1040 ez 2012   RTAA payments received from a state must be included in your income. Irs 1040 ez 2012 The state must send you Form 1099-G to advise you of the amount you should include in income. Irs 1040 ez 2012 The amount should be reported on Form 1040, line 21. Irs 1040 ez 2012 Persons with disabilities. Irs 1040 ez 2012   If you have a disability, you must include in income compensation you receive for services you perform unless the compensation is otherwise excluded. Irs 1040 ez 2012 However, you do not include in income the value of goods, services, and cash that you receive, not in return for your services, but for your training and rehabilitation because you have a disability. Irs 1040 ez 2012 Excludable amounts include payments for transportation and attendant care, such as interpreter services for the deaf, reader services for the blind, and services to help individuals with an intellectual disability do their work. Irs 1040 ez 2012 Disaster relief grants. Irs 1040 ez 2012    Do not include post-disaster grants received under the Robert T. Irs 1040 ez 2012 Stafford Disaster Relief and Emergency Assistance Act in your income if the grant payments are made to help you meet necessary expenses or serious needs for medical, dental, housing, personal property, transportation, child care, or funeral expenses. Irs 1040 ez 2012 Do not deduct casualty losses or medical expenses that are specifically reimbursed by these disaster relief grants. Irs 1040 ez 2012 If you have deducted a casualty loss for the loss of your personal residence and you later receive a disaster relief grant for the loss of the same residence, you may have to include part or all of the grant in your taxable income. Irs 1040 ez 2012 See Recoveries , earlier. Irs 1040 ez 2012 Unemployment assistance payments under the Act are taxable unemployment compensation. Irs 1040 ez 2012 See Unemployment compensation under Unemployment Benefits, earlier. Irs 1040 ez 2012 Disaster relief payments. Irs 1040 ez 2012   You can exclude from income any amount you receive that is a qualified disaster relief payment. Irs 1040 ez 2012 A qualified disaster relief payment is an amount paid to you: To reimburse or pay reasonable and necessary personal, family, living, or funeral expenses that result from a qualified disaster; To reimburse or pay reasonable and necessary expenses incurred for the repair or rehabilitation of your home or repair or replacement of its contents to the extent it is due to a qualified disaster; By a person engaged in the furnishing or sale of transportation as a common carrier because of the death or personal physical injuries incurred as a result of a qualified disaster; or By a federal, state, or local government, or agency, or instrumentality in connection with a qualified disaster in order to promote the general welfare. Irs 1040 ez 2012 You can exclude this amount only to the extent any expense it pays for is not paid for by insurance or otherwise. Irs 1040 ez 2012 The exclusion does not apply if you were a participant or conspirator in a terrorist action or a representative of one. Irs 1040 ez 2012   A qualified disaster is: A disaster which results from a terrorist or military action; A federally declared disaster; or A disaster which results from an accident involving a common carrier, or from any other event, which is determined to be catastrophic by the Secretary of the Treasury or his or her delegate. Irs 1040 ez 2012   For amounts paid under item (4), a disaster is qualified if it is determined by an applicable federal, state, or local authority to warrant assistance from the federal, state, or local government, agency, or instrumentality. Irs 1040 ez 2012 Disaster mitigation payments. Irs 1040 ez 2012   You also can exclude from income any amount you receive that is a qualified disaster mitigation payment. Irs 1040 ez 2012 Qualified disaster mitigation payments are also most commonly paid to you in the period immediately following damage to property as a result of a natural disaster. Irs 1040 ez 2012 However, disaster mitigation payments are used to mitigate (reduce the severity of) potential damage from future natural disasters. Irs 1040 ez 2012 They are paid to you through state and local governments based on the provisions of the Robert T. Irs 1040 ez 2012 Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act. Irs 1040 ez 2012   You cannot increase the basis or adjusted basis of your property for improvements made with nontaxable disaster mitigation payments. Irs 1040 ez 2012 Home Affordable Modification Program (HAMP). Irs 1040 ez 2012   If you benefit from Pay-for-Performance Success Payments under HAMP, the payments are not taxable. Irs 1040 ez 2012 Mortgage assistance payments under section 235 of the National Housing Act. Irs 1040 ez 2012   Payments made under section 235 of the National Housing Act for mortgage assistance are not included in the homeowner's income. Irs 1040 ez 2012 Interest paid for the homeowner under the mortgage assistance program cannot be deducted. Irs 1040 ez 2012 Medicare. Irs 1040 ez 2012   Medicare benefits received under title XVIII of the Social Security Act are not includible in the gross income of the individuals for whom they are paid. Irs 1040 ez 2012 This includes basic (part A (Hospital Insurance Benefits for the Aged)) and supplementary (part B (Supplementary Medical Insurance Benefits for the Aged)). Irs 1040 ez 2012 Old-age, survivors, and disability insurance benefits (OASDI). Irs 1040 ez 2012   Generally, OASDI payments under section 202 of title II of the Social Security Act are not includible in the gross income of the individuals to whom they are paid. Irs 1040 ez 2012 This applies to old-age insurance benefits, and insurance benefits for wives, husbands, children, widows, widowers, mothers and fathers, and parents, as well as the lump-sum death payment. Irs 1040 ez 2012 Nutrition Program for the Elderly. Irs 1040 ez 2012    Food benefits you receive under the Nutrition Program for the Elderly are not taxable. Irs 1040 ez 2012 If you prepare and serve free meals for the program, include in your income as wages the cash pay you receive, even if you are also eligible for food benefits. Irs 1040 ez 2012 Payments to reduce cost of winter energy. Irs 1040 ez 2012   Payments made by a state to qualified people to reduce their cost of winter energy use are not taxable. Irs 1040 ez 2012 Other Income The following brief discussions are arranged in alphabetical order. Irs 1040 ez 2012 Other income items briefly discussed below are referenced to publications which provide more topical information. Irs 1040 ez 2012 Activity not for profit. Irs 1040 ez 2012   You must include on your return income from an activity from which you do not expect to make a profit. Irs 1040 ez 2012 An example of this type of activity is a hobby or a farm you operate mostly for recreation and pleasure. Irs 1040 ez 2012 Enter this income on Form 1040, line 21. Irs 1040 ez 2012 Deductions for expenses related to the activity are limited. Irs 1040 ez 2012 They cannot total more than the income you report and can be taken only if you itemize deductions on Schedule A (Form 1040). Irs 1040 ez 2012 See Not-for-Profit Activities in chapter 1 of Publication 535 for information on whether an activity is considered carried on for a profit. Irs 1040 ez 2012 Alaska Permanent Fund dividend. Irs 1040 ez 2012   If you received a payment from Alaska's mineral income fund (Alaska Permanent Fund dividend), report it as income on line 21 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. Irs 1040 ez 2012 The state of Alaska sends each recipient a document that shows the amount of the payment with the check. Irs 1040 ez 2012 The amount also is reported to IRS. Irs 1040 ez 2012 Alimony. Irs 1040 ez 2012   Include in your income on Form 1040, line 11, any alimony payments you receive. Irs 1040 ez 2012 Amounts you receive for child support are not income to you. Irs 1040 ez 2012 Alimony and child support payments are discussed in chapter 18. Irs 1040 ez 2012 Bribes. Irs 1040 ez 2012   If you receive a bribe, include it in your income. Irs 1040 ez 2012 Campaign contributions. Irs 1040 ez 2012   These contributions are not income to a candidate unless they are diverted to his or her personal use. Irs 1040 ez 2012 To be exempt from tax, the contributions must be spent for campaign purposes or kept in a fund for use in future campaigns. Irs 1040 ez 2012 However, interest earned on bank deposits, dividends received on contributed securities, and net gains realized on sales of contributed securities are taxable and must be reported on Form 1120-POL, U. Irs 1040 ez 2012 S. Irs 1040 ez 2012 Income Tax Return for Certain Political Organizations. Irs 1040 ez 2012 Excess campaign funds transferred to an office account must be included in the officeholder's income on Form 1040, line 21, in the year transferred. Irs 1040 ez 2012 Car pools. Irs 1040 ez 2012   Do not include in your income amounts you receive from the passengers for driving a car in a car pool to and from work. Irs 1040 ez 2012 These amounts are considered reimbursement for your expenses. Irs 1040 ez 2012 However, this rule does not apply if you have developed car pool arrangements into a profit-making business of transporting workers for hire. Irs 1040 ez 2012 Cash rebates. Irs 1040 ez 2012   A cash rebate you receive from a dealer or manufacturer of an item you buy is not income, but you must reduce your basis by the amount of the rebate. Irs 1040 ez 2012 Example. Irs 1040 ez 2012 You buy a new car for $24,000 cash and receive a $2,000 rebate check from the manufacturer. Irs 1040 ez 2012 The $2,000 is not income to you. Irs 1040 ez 2012 Your basis in the car is $22,000. Irs 1040 ez 2012 This is the basis on which you figure gain or loss if you sell the car and depreciation if you use it for business. Irs 1040 ez 2012 Casualty insurance and other reimbursements. Irs 1040 ez 2012   You generally should not report these reimbursements on your return unless you are figuring gain or loss from the casualty or theft. Irs 1040 ez 2012 See chapter 25 for more information. Irs 1040 ez 2012 Child support payments. Irs 1040 ez 2012   You should not report these payments on your return. Irs 1040 ez 2012 See chapter 18 for more information. Irs 1040 ez 2012 Court awards and damages. Irs 1040 ez 2012   To determine if settlement amounts you receive by compromise or judgment must be included in your income, you must consider the item that the settlement replaces. Irs 1040 ez 2012 The character of the income as ordinary income or capital gain depends on the nature of the underlying claim. Irs 1040 ez 2012 Include the following as ordinary income. Irs 1040 ez 2012 Interest on any award. Irs 1040 ez 2012 Compensation for lost wages or lost profits in most cases. Irs 1040 ez 2012 Punitive damages, in most cases. Irs 1040 ez 2012 It does not matter if they relate to a physical injury or physical sickness. Irs 1040 ez 2012 Amounts received in settlement of pension rights (if you did not contribute to the plan). Irs 1040 ez 2012 Damages for: Patent or copyright infringement, Breach of contract, or Interference with business operations. Irs 1040 ez 2012 Back pay and damages for emotional distress received to satisfy a claim under title VII of the Civil Rights Act of 1964. Irs 1040 ez 2012 Attorney fees and costs (including contingent fees) where the underlying recovery is included in gross income. Irs 1040 ez 2012   Do not include in your income compensatory damages for personal physical injury or physical sickness (whether received in a lump sum or installments). Irs 1040 ez 2012 Emotional distress. Irs 1040 ez 2012   Emotional distress itself is not a physical injury or physical sickness, but damages you receive for emotional distress due to a physical injury or sickness are treated as received for the physical injury or sickness. Irs 1040 ez 2012 Do not include them in your income. Irs 1040 ez 2012   If the emotional distress is due to a personal injury that is not due to a physical injury or sickness (for example, employment discrimination or injury to reputation), you must include the damages in your income, except for any damages you receive for medical care due to that emotional distress. Irs 1040 ez 2012 Emotional distress includes physical symptoms that result from emotional distress, such as headaches, insomnia, and stomach disorders. Irs 1040 ez 2012 Deduction for costs involved in unlawful discrimination suits. Irs 1040 ez 2012   You may be able to deduct attorney fees and court costs paid to recover a judgment or settlement for a claim of unlawful discrimination under various provisions of federal, state, and local law listed in Internal Revenue Code section 62(e), a claim against the United States government, or a claim under section 1862(b)(3)(A) of the Social Security Act. Irs 1040 ez 2012 For more information, see Publication 525. Irs 1040 ez 2012 Credit card insurance. Irs 1040 ez 2012   In most cases, if you receive benefits under a credit card disability or unemployment insurance plan, the benefits are taxable to you. Irs 1040 ez 2012 These plans make the minimum monthly payment on your credit card account if you cannot make the payment due to injury, illness, disability, or unemployment. Irs 1040 ez 2012 Report on Form 1040, line 21, the amount of benefits you received during the year that is more than the amount of the premiums you paid during the year. Irs 1040 ez 2012 Down payment assistance. Irs 1040 ez 2012   If you purchase a home and receive assistance from a nonprofit corporation to make the down payment, that assistance is not included in your income. Irs 1040 ez 2012 If the corporation qualifies as a tax-exempt charitable organization, the assistance is treated as a gift and is included in your basis of the house. Irs 1040 ez 2012 If the corporation does not qualify, the assistance is treated as a rebate or reduction of the purchase price and is not included in your basis. Irs 1040 ez 2012 Employment agency fees. Irs 1040 ez 2012   If you get a job through an employment agency, and the fee is paid by your employer, the fee is not includible in your income if you are not liable for it. Irs 1040 ez 2012 However, if you pay it and your employer reimburses you for it, it is includible in your income. Irs 1040 ez 2012 Energy conservation subsidies. Irs 1040 ez 2012   You can exclude from gross income any subsidy provided, either directly or indirectly, by public utilities for the purchase or installation of an energy conservation measure for a dwelling unit. Irs 1040 ez 2012 Energy conservation measure. Irs 1040 ez 2012   This includes installations or modifications that are primarily designed to reduce consumption of electricity or natural gas, or improve the management of energy demand. Irs 1040 ez 2012 Dwelling unit. Irs 1040 ez 2012   This includes a house, apartment, condominium, mobile home, boat, or similar property. Irs 1040 ez 2012 If a building or structure contains both dwelling and other units, any subsidy must be properly allocated. Irs 1040 ez 2012 Estate and trust income. Irs 1040 ez 2012    An estate or trust, unlike a partnership, may have to pay federal income tax. Irs 1040 ez 2012 If you are a beneficiary of an estate or trust, you may be taxed on your share of its income distributed or required to be distributed to you. Irs 1040 ez 2012 However, there is never a double tax. Irs 1040 ez 2012 Estates and trusts file their returns on Form 1041, U. Irs 1040 ez 2012 S. Irs 1040 ez 2012 Income Tax Return for Estates and Trusts, and your share of the income is reported to you on Schedule K-1 (Form 1041). Irs 1040 ez 2012 Current income required to be distributed. Irs 1040 ez 2012   If you are the beneficiary of an estate or trust that must distribute all of its current income, you must report your share of the distributable net income, whether or not you actually received it. Irs 1040 ez 2012 Current income not required to be distributed. Irs 1040 ez 2012    If you are the beneficiary of an estate or trust and the fiduciary has the choice of whether to distribute all or part of the current income, you must report: All income that is required to be distributed to you, whether or not it is actually distributed, plus All other amounts actually paid or credited to you, up to the amount of your share of distributable net income. Irs 1040 ez 2012 How to report. Irs 1040 ez 2012   Treat each item of income the same way that the estate or trust would treat it. Irs 1040 ez 2012 For example, if a trust's dividend income is distributed to you, you report the distribution as dividend income on your return. Irs 1040 ez 2012 The same rule applies to distributions of tax-exempt interest and capital gains. Irs 1040 ez 2012   The fiduciary of the estate or trust must tell you the type of items making up your share of the estate or trust income and any credits you are allowed on your individual income tax return. Irs 1040 ez 2012 Losses. Irs 1040 ez 2012   Losses of estates and trusts generally are not deductible by the beneficiaries. Irs 1040 ez 2012 Grantor trust. Irs 1040 ez 2012   Income earned by a grantor trust is taxable to the grantor, not the beneficiary, if the grantor keeps certain control over the trust. Irs 1040 ez 2012 (The grantor is the one who transferred property to the trust. Irs 1040 ez 2012 ) This rule applies if the property (or income from the property) put into the trust will or may revert (be returned) to the grantor or the grantor's spouse. Irs 1040 ez 2012   Generally, a trust is a grantor trust if the grantor has a reversionary interest valued (at the date of transfer) at more than 5% of the value of the transferred property. Irs 1040 ez 2012 Expenses paid by another. Irs 1040 ez 2012   If your personal expenses are paid for by another person, such as a corporation, the payment may be taxable to you depending upon your relationship with that person and the nature of the payment. Irs 1040 ez 2012 But if the payment makes up for a loss caused by that person, and only restores you to the position you were in before the loss, the payment is not includible in your income. Irs 1040 ez 2012 Fees for services. Irs 1040 ez 2012   Include all fees for your services in your income. Irs 1040 ez 2012 Examples of these fees are amounts you receive for services you perform as: A corporate director, An executor, administrator, or personal representative of an estate, A manager of a trade or business you operated before declaring Chapter 11 bankruptcy, A notary public, or An election precinct official. Irs 1040 ez 2012 Nonemployee compensation. Irs 1040 ez 2012   If you are not an employee and the fees for your services from the same payer total $600 or more for the year, you may receive a Form 1099-MISC. Irs 1040 ez 2012 You may need to report your fees as self-employment income. Irs 1040 ez 2012 See Self-Employed Persons , in chapter 1, for a discussion of when you are considered self-employed. Irs 1040 ez 2012 Corporate director. Irs 1040 ez 2012   Corporate director fees are self-employment income. Irs 1040 ez 2012 Report these payments on Schedule C or Schedule C-EZ (Form 1040). Irs 1040 ez 2012 Personal representatives. Irs 1040 ez 2012   All personal representatives must include in their gross income fees paid to them from an estate. Irs 1040 ez 2012 If you are not in the trade or business of being an executor (for instance, you are the executor of a friend's or relative's estate), report these fees on Form 1040, line 21. Irs 1040 ez 2012 If you are in the trade or business of being an executor, report these fees as self-employment income on Schedule C or Schedule C-EZ (Form 1040). Irs 1040 ez 2012 The fee is not includible in income if it is waived. Irs 1040 ez 2012 Manager of trade or business for bankruptcy estate. Irs 1040 ez 2012   Include in your income all payments received from your bankruptcy estate for managing or operating a trade or business that you operated before you filed for bankruptcy. Irs 1040 ez 2012 Report this income on Form 1040, line 21. Irs 1040 ez 2012 Notary public. Irs 1040 ez 2012    Report payments for these services on Schedule C or Schedule C-EZ (Form 1040). Irs 1040 ez 2012 These payments are not subject to self-employment tax. Irs 1040 ez 2012 See the separate instructions for Schedule SE (Form 1040) for details. Irs 1040 ez 2012 Election precinct official. Irs 1040 ez 2012    You should receive a Form W-2 showing payments for services performed as an election official or election worker. Irs 1040 ez 2012 Report these payments on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. Irs 1040 ez 2012 Foster care providers. Irs 1040 ez 2012   Payments you receive from a state, political subdivision, or a qualified foster care placement agency for providing care to qualified foster individuals in your home generally are not included in your income. Irs 1040 ez 2012 However, you must include in your income payments received for the care of more than 5 individuals age 19 or older and certain difficulty-of-care payments. Irs 1040 ez 2012   A qualified foster individual is a person who: Is living in a foster family home, and Was placed there by: An agency of a state or one of its political subdivisions, or A qualified foster care placement agency. Irs 1040 ez 2012 Difficulty-of-care payments. Irs 1040 ez 2012   These are additional payments that are designated by the payer as compensation for providing the additional care that is required for physically, mentally, or emotionally handicapped qualified foster individuals. Irs 1040 ez 2012 A state must determine that the additional compensation is needed, and the care for which the payments are made must be provided in your home. Irs 1040 ez 2012   You must include in your income difficulty-of-care payments received for more than: 10 qualified foster individuals under age 19, or 5 qualified foster individuals age 19 or older. Irs 1040 ez 2012 Maintaining space in home. Irs 1040 ez 2012   If you are paid to maintain space in your home for emergency foster care, you must include the payment in your income. Irs 1040 ez 2012 Reporting taxable payments. Irs 1040 ez 2012    If you receive payments that you must include in your income, you are in business as a foster care provider and you are self-employed. Irs 1040 ez 2012 Report the payments on Schedule C or Schedule C-EZ (Form 1040). Irs 1040 ez 2012 See Publication 587, Business Use of Your Home, to help you determine the amount you can deduct for the use of your home. Irs 1040 ez 2012 Found property. Irs 1040 ez 2012   If you find and keep property that does not belong to you that has been lost or abandoned (treasure-trove), it is taxable to you at its fair market value in the first year it is your undisputed possession. Irs 1040 ez 2012 Free tour. Irs 1040 ez 2012   If you received a free tour from a travel agency for organizing a group of tourists, you must include its value in your income. Irs 1040 ez 2012 Report the fair market value of the tour on Form 1040, line 21, if you are not in the trade or business of organizing tours. Irs 1040 ez 2012 You cannot deduct your expenses in serving as the voluntary leader of the group at the group's request. Irs 1040 ez 2012 If you organize tours as a trade or business, report the tour's value on Schedule C or Schedule C-EZ (Form 1040). Irs 1040 ez 2012 Gambling winnings. Irs 1040 ez 2012   You must include your gambling winnings in income on Form 1040, line 21. Irs 1040 ez 2012 If you itemize your deductions on Schedule A (Form 1040), you can deduct gambling losses you had during the year, but only up to the amount of your winnings. Irs 1040 ez 2012 Lotteries and raffles. Irs 1040 ez 2012   Winnings from lotteries and raffles are gambling winnings. Irs 1040 ez 2012 In addition to cash winnings, you must include in your income the fair market value of bonds, cars, houses, and other noncash prizes. Irs 1040 ez 2012    If you win a state lottery prize payable in installments, see Publication 525 for more information. Irs 1040 ez 2012 Form W-2G. Irs 1040 ez 2012   You may have received a Form W-2G, Certain Gambling Winnings, showing the amount of your gambling winnings and any tax taken out of them. Irs 1040 ez 2012 Include the amount from box 1 on Form 1040, line 21. Irs 1040 ez 2012 Include the amount shown in box 4 on Form 1040, line 62, as federal income tax withheld. Irs 1040 ez 2012 Reporting winnings and recordkeeping. Irs 1040 ez 2012   For more information on reporting gam
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The Irs 1040 Ez 2012

Irs 1040 ez 2012 6. Irs 1040 ez 2012   Tuition and Fees Deduction Table of Contents IntroductionWhat is the tax benefit of the tuition and fees deduction. Irs 1040 ez 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). Irs 1040 ez 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. Irs 1040 ez 2012 The qualified expenses must be for higher education, as explained later under Qualified Education Expenses . Irs 1040 ez 2012 What is the tax benefit of the tuition and fees deduction. Irs 1040 ez 2012   The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. Irs 1040 ez 2012   This deduction is taken as an adjustment to income. Irs 1040 ez 2012 This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). Irs 1040 ez 2012 This deduction may be beneficial to you if you do not qualify for the American opportunity or lifetime learning credits. Irs 1040 ez 2012 You can choose the education benefit that will give you the lowest tax. Irs 1040 ez 2012 You may want to compare the tuition and fees deduction to the education credits. Irs 1040 ez 2012 See chapter 2, American Opportunity Credit and chapter 3, Lifetime Learning Credit for more information on the education credits. Irs 1040 ez 2012 Table 6-1. Irs 1040 ez 2012 Tuition and Fees Deduction at a Glance summarizes the features of the tuition and fees deduction. Irs 1040 ez 2012 Can You Claim the Deduction The following rules will help you determine if you can claim the tuition and fees deduction. Irs 1040 ez 2012 Who Can Claim the Deduction Generally, you can claim the tuition and fees deduction if all three of the following requirements are met. Irs 1040 ez 2012 You pay qualified education expenses of higher education. Irs 1040 ez 2012 You pay the education expenses for an eligible student. Irs 1040 ez 2012 The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption on your tax return. Irs 1040 ez 2012 The term “qualified education expenses” is defined later under Qualified Education Expenses . Irs 1040 ez 2012 “Eligible student” is defined later under Who Is an Eligible Student . Irs 1040 ez 2012 For more information on claiming the deduction for a dependent, see Who Can Claim a Dependent's Expenses , later. Irs 1040 ez 2012 Table 6-1. Irs 1040 ez 2012 Tuition and Fees Deduction at a Glance Do not rely on this table alone. Irs 1040 ez 2012 Refer to the text for complete details. Irs 1040 ez 2012 Question Answer What is the maximum benefit? You can reduce your income subject to tax by up to $4,000. Irs 1040 ez 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). Irs 1040 ez 2012 Where is the deduction taken? As an adjustment to income on  Form 1040 or Form 1040A. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 Who Cannot Claim the Deduction You cannot claim the tuition and fees deduction if any of the following apply. Irs 1040 ez 2012 Your filing status is married filing separately. Irs 1040 ez 2012 Another person can claim an exemption for you as a dependent on his or her tax return. Irs 1040 ez 2012 You cannot take the deduction even if the other person does not actually claim that exemption. Irs 1040 ez 2012 Your modified adjusted gross income (MAGI) is more than $80,000 ($160,000 if filing a joint return). Irs 1040 ez 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. Irs 1040 ez 2012 More information on nonresident aliens can be found in Publication 519. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 Academic period. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 Paid with borrowed funds. Irs 1040 ez 2012   You can claim a tuition and fees deduction for qualified education expenses paid with the proceeds of a loan. Irs 1040 ez 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. Irs 1040 ez 2012 Treat loan disbursements sent directly to the educational institution as paid on the date the institution credits the student's account. Irs 1040 ez 2012 Student withdraws from class(es). Irs 1040 ez 2012   You can claim a tuition and fees deduction for qualified education expenses not refunded when a student withdraws. Irs 1040 ez 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. Irs 1040 ez 2012 Eligible educational institution. Irs 1040 ez 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. Irs 1040 ez 2012 S. Irs 1040 ez 2012 Department of Education. Irs 1040 ez 2012 It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Irs 1040 ez 2012 The educational institution should be able to tell you if it is an eligible educational institution. Irs 1040 ez 2012   Certain educational institutions located outside the United States also participate in the U. Irs 1040 ez 2012 S. Irs 1040 ez 2012 Department of Education's Federal Student Aid (FSA) programs. Irs 1040 ez 2012 Related expenses. Irs 1040 ez 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. Irs 1040 ez 2012 Prepaid expenses. Irs 1040 ez 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. Irs 1040 ez 2012 See Academic period , earlier. Irs 1040 ez 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). Irs 1040 ez 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). Irs 1040 ez 2012 In the following examples, assume that each student is an eligible student and each college or university an eligible educational institution. Irs 1040 ez 2012 Example 1. Irs 1040 ez 2012 Jackson is a sophomore in University V's degree program in dentistry. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 Example 2. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 Charles bought his books from a friend, so what he paid for them is not a qualified education expense. Irs 1040 ez 2012 Donna bought hers at College W's bookstore. Irs 1040 ez 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. Irs 1040 ez 2012 Example 3. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 No portion of the fee covers personal expenses. Irs 1040 ez 2012 Although labeled as a student activity fee, the fee is required for Marci's enrollment and attendance at College X. Irs 1040 ez 2012 Therefore, it is a qualified expense. Irs 1040 ez 2012 No Double Benefit Allowed You cannot do any of the following. Irs 1040 ez 2012 Deduct qualified education expenses you deduct under any other provision of the law, for example, as a business expense. Irs 1040 ez 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. Irs 1040 ez 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). Irs 1040 ez 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. Irs 1040 ez 2012 See Coordination With Tuition and Fees Deduction in chapter 8, Qualified Tuition Program, later. Irs 1040 ez 2012 Deduct qualified education expenses that have been paid with tax-free interest on U. Irs 1040 ez 2012 S. Irs 1040 ez 2012 savings bonds (Form 8815). Irs 1040 ez 2012 See Figuring the Tax-Free Amount in chapter 10, Education Savings Bond Program, later. Irs 1040 ez 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. Irs 1040 ez 2012 See the following section on Adjustments to Qualified Education Expenses. Irs 1040 ez 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. Irs 1040 ez 2012 The result is the amount of adjusted qualified education expenses for each student. Irs 1040 ez 2012 You must also reduce qualified education expenses by the other amounts referred to in No Double Benefit Allowed , earlier. Irs 1040 ez 2012 Tax-free educational assistance. Irs 1040 ez 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. Irs 1040 ez 2012 See Academic period , earlier. Irs 1040 ez 2012   Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. Irs 1040 ez 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). Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 Generally, any scholarship or fellowship is treated as tax free. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 For details, see Adjustments to Qualified Education Expenses in chapters 2 and 3. Irs 1040 ez 2012 Refunds. Irs 1040 ez 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. Irs 1040 ez 2012 Some tax-free educational assistance received after 2013 may be treated as a refund. Irs 1040 ez 2012 See Tax-free educational assistance , earlier. Irs 1040 ez 2012 Refunds received in 2013. Irs 1040 ez 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. Irs 1040 ez 2012 Refunds received after 2013 but before your income tax return is filed. Irs 1040 ez 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. Irs 1040 ez 2012 Refunds received after 2013 and after your income tax return is filed. Irs 1040 ez 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. Irs 1040 ez 2012 See Credit recapture , later. Irs 1040 ez 2012 Coordination with Coverdell education savings accounts and qualified tuition programs. Irs 1040 ez 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). Irs 1040 ez 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. Irs 1040 ez 2012 Credit recapture. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 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). Irs 1040 ez 2012 Include that amount as an additional tax for the year the refund or tax-free assistance was received. Irs 1040 ez 2012 Example. Irs 1040 ez 2012   You paid $3,500 of qualified education expenses in December 2013, and your child began college in January 2014. Irs 1040 ez 2012 You claimed $3,500 as the tuition and fees deduction on your 2013 income tax return. Irs 1040 ez 2012 The reduction reduced your taxable income by $3,500. Irs 1040 ez 2012 Also, you claimed no tax credits in 2013. Irs 1040 ez 2012 Your child withdrew from two classes and you received a refund of $2,000 in 2014 after you filed your 2013 tax return. Irs 1040 ez 2012 Refigure your 2013 tuition and fees deduction using $1,500 of qualified education expense instead of the $3,500. Irs 1040 ez 2012 The refigured tuition and fees deduction is $1,500. Irs 1040 ez 2012 Do not file an amended 2013 tax return to account for this adjustment. Irs 1040 ez 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. Irs 1040 ez 2012 You cannot file Form 1040A for 2014. Irs 1040 ez 2012 Amounts that do not reduce qualified education expenses. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 The use of the money is not restricted. Irs 1040 ez 2012 Example 1. Irs 1040 ez 2012 In 2013, Jackie paid $3,000 for tuition and $5,000 for room and board at University X. Irs 1040 ez 2012 The university did not require her to pay any fees in addition to her tuition in order to enroll in or attend classes. Irs 1040 ez 2012 To help pay these costs, she was awarded a $2,000 scholarship and a $4,000 student loan. Irs 1040 ez 2012 The terms of the scholarship state that it can be used to pay any of Jackie's college expenses. Irs 1040 ez 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. Irs 1040 ez 2012 Jackie does not report any portion of the scholarship as income on her tax return. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 Jackie is treated as having paid $1,000 in qualified education expenses ($3,000 tuition – $2,000 scholarship) in 2013. Irs 1040 ez 2012 Example 2. Irs 1040 ez 2012 The facts are the same as in Example 1, except that Jackie reports her entire scholarship as income on her tax return. Irs 1040 ez 2012 Because Jackie reported the entire $2,000 scholarship in her income, she does not need to reduce her qualified education expenses. Irs 1040 ez 2012 Jackie is treated as having paid $3,000 in qualified education expenses. Irs 1040 ez 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. Irs 1040 ez 2012 This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. Irs 1040 ez 2012 Sports, games, hobbies, and noncredit courses. Irs 1040 ez 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. Irs 1040 ez 2012 However, if the course of instruction or other education is part of the student's degree program, these expenses can qualify. Irs 1040 ez 2012 Comprehensive or bundled fees. Irs 1040 ez 2012   Some eligible educational institutions combine all of their fees for an academic period into one amount. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 See Figuring the Deduction , later, for more information about Form 1098-T. Irs 1040 ez 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). Irs 1040 ez 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. Irs 1040 ez 2012 For you to be able to deduct qualified education expenses for your dependent, you must claim an exemption for that individual. Irs 1040 ez 2012 You do this by listing your dependent's name and other required information on Form 1040 (or Form 1040A), line 6c. Irs 1040 ez 2012 IF your dependent is an eligible student and you. Irs 1040 ez 2012 . Irs 1040 ez 2012 . Irs 1040 ez 2012 AND. Irs 1040 ez 2012 . Irs 1040 ez 2012 . Irs 1040 ez 2012 THEN. Irs 1040 ez 2012 . Irs 1040 ez 2012 . Irs 1040 ez 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. Irs 1040 ez 2012 Your dependent cannot take a deduction. Irs 1040 ez 2012 claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. Irs 1040 ez 2012 do not claim an exemption for your dependent you paid all qualified education expenses no one is allowed to take a deduction. Irs 1040 ez 2012 do not claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. Irs 1040 ez 2012 Expenses paid by dependent. Irs 1040 ez 2012   If your dependent pays qualified education expenses, no one can take a tuition and fees deduction for those expenses. Irs 1040 ez 2012 Neither you nor your dependent can deduct the expenses. Irs 1040 ez 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. Irs 1040 ez 2012 This rule applies even if you do not claim an exemption for your dependent on your tax return. Irs 1040 ez 2012 Expenses paid by you. Irs 1040 ez 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. Irs 1040 ez 2012 Expenses paid under divorce decree. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 Expenses paid by others. Irs 1040 ez 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. Irs 1040 ez 2012 In this case, the student is treated as receiving the payment from the other person and, in turn, paying the institution. Irs 1040 ez 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. Irs 1040 ez 2012 If the student is not a dependent, only the student can deduct payments made directly to the institution for his or her expenses. Irs 1040 ez 2012 If the student is your dependent, no one can deduct the payments. Irs 1040 ez 2012 Example. Irs 1040 ez 2012 In 2013, Ms. Irs 1040 ez 2012 Baker makes a payment directly to an eligible educational institution for her grandson Dan's qualified education expenses. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 If someone else can claim an exemption for Dan, no one will be allowed a deduction for Ms. Irs 1040 ez 2012 Baker's payment. Irs 1040 ez 2012 Tuition reduction. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 For more information on tuition reductions, see Qualified Tuition Reduction , in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Irs 1040 ez 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. Irs 1040 ez 2012 See Effect of the Amount of Your Income on the Amount of Your Deduction , later. Irs 1040 ez 2012 Form 1098-T. Irs 1040 ez 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). Irs 1040 ez 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. Irs 1040 ez 2012 An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. Irs 1040 ez 2012 However, the amount in boxes 1 and 2 of Form 1098-T might be different than what you paid. Irs 1040 ez 2012 When figuring the deduction, use only the amounts you paid in 2013 for qualified education expenses. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 No tuition and fees deduction is allowed if your MAGI is larger than $80,000 ($160,000 if you are married filing jointly). Irs 1040 ez 2012 Modified adjusted gross income (MAGI). Irs 1040 ez 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. Irs 1040 ez 2012 However, as discussed below, there may be other modifications. Irs 1040 ez 2012 MAGI when using Form 1040A. Irs 1040 ez 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). Irs 1040 ez 2012 MAGI when using Form 1040. Irs 1040 ez 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. Irs 1040 ez 2012   Table 6-2 shows how the amount of your MAGI can affect your tuition and fees deduction. Irs 1040 ez 2012   You can use Worksheet 6-1. Irs 1040 ez 2012 MAGI for the Tuition and Fees Deduction , later, to figure your MAGI. Irs 1040 ez 2012 Table 6-2. Irs 1040 ez 2012 Effect of MAGI on Maximum Tuition and Fees Deduction IF your filing status is. Irs 1040 ez 2012 . Irs 1040 ez 2012 . Irs 1040 ez 2012 AND your MAGI is. Irs 1040 ez 2012 . Irs 1040 ez 2012 . Irs 1040 ez 2012 THEN your maximum tuition and fees deduction is. Irs 1040 ez 2012 . Irs 1040 ez 2012 . Irs 1040 ez 2012 single,  head of household, or qualifying widow(er) not more than $65,000 $4,000. Irs 1040 ez 2012 more than $65,000  but not more than $80,000 $2,000. Irs 1040 ez 2012 more than $80,000 $0. Irs 1040 ez 2012 married filing joint return not more than $130,000 $4,000. Irs 1040 ez 2012 more than $130,000 but not more than $160,000 $2,000. Irs 1040 ez 2012 more than $160,000 $0. Irs 1040 ez 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. Irs 1040 ez 2012 Enter the deduction on Form 1040, line 34, or Form 1040A, line 19. Irs 1040 ez 2012 A filled-in Form 8917 is shown at the end of this chapter. Irs 1040 ez 2012 Illustrated Example Tim Pfister, a single taxpayer, enrolled full-time at a local college to earn a degree in engineering. Irs 1040 ez 2012 This is the first year of his postsecondary education. Irs 1040 ez 2012 During 2013, he paid $3,600 for his qualified 2013 tuition expense. Irs 1040 ez 2012 Both he and the college meet all of the requirements for the tuition and fees deduction. Irs 1040 ez 2012 Tim's total income (Form 1040, line 22) and MAGI are $26,000. Irs 1040 ez 2012 He figures his deduction of $3,600 as shown on Form 8917, later. Irs 1040 ez 2012 Worksheet 6-1. Irs 1040 ez 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. Irs 1040 ez 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. Irs 1040 ez 2012 1. Irs 1040 ez 2012 Enter the amount from Form 1040, line 22   1. Irs 1040 ez 2012         2. Irs 1040 ez 2012 Enter the total from Form 1040, lines 23 through 33   2. Irs 1040 ez 2012               3. Irs 1040 ez 2012 Enter the total of any amounts entered on the dotted line next to Form 1040, line 36   3. Irs 1040 ez 2012               4. Irs 1040 ez 2012 Add lines 2 and 3   4. Irs 1040 ez 2012         5. Irs 1040 ez 2012 Subtract line 4 from line 1   5. Irs 1040 ez 2012         6. Irs 1040 ez 2012 Enter your foreign earned income exclusion and/or housing  exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   6. Irs 1040 ez 2012         7. Irs 1040 ez 2012 Enter your foreign housing deduction (Form 2555, line 50)   7. Irs 1040 ez 2012         8. Irs 1040 ez 2012 Enter the amount of income from Puerto Rico you are excluding   8. Irs 1040 ez 2012         9. Irs 1040 ez 2012 Enter the amount of income from American Samoa you are  excluding (Form 4563, line 15)   9. Irs 1040 ez 2012         10. Irs 1040 ez 2012 Add lines 5 through 9. Irs 1040 ez 2012 This is your modified adjusted gross income   10. Irs 1040 ez 2012     Note. Irs 1040 ez 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. Irs 1040 ez 2012       This image is too large to be displayed in the current screen. Irs 1040 ez 2012 Please click the link to view the image. Irs 1040 ez 2012 Form 8917 for Tim Pfister Prev  Up  Next   Home   More Online Publications