File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Irs Amended Return Instructions

Irs Gov Tax Forms 2012How To Fill Out A 1040x Form For The IrsState Income Taxes More:label_state_20income_20taxes More:financialsoftForm 1040ezFederal Income Tax FormsFile State And Federal Taxes Online FreeFree 1040xWhat Form Do I Need To Amend My TaxesFree State E File Tax ReturnFree H&r Block Tax Software 20112011 Tax Forms 1040How To Fill Out State Tax Form1040ez Form 2011TaxesE File Tax ExtensionTax Return Form1040 NowInstructions For 1040ez 2013Filing 2012 TaxesIrs 2010 Form 1040Income Tax Forms 2012Turbotax State Efile CouponHow Do I Fill Out 1040xFree State File TurbotaxCan Amended Returns Be E Filed1040 InstructionsFile State Tax OnlineFree Online Federal Tax Filing 20112012 1040 Tax FormsTurbotax Do Taxes For 2010State Tax Forms FreeAmending 2012 Federal Tax ReturnFile State Tax Return OnlyPrintable Tax Forms 1040ezTurbotax Free FileFile Free Tax ExtensionState Income Tax ChartFile Free State Return Only1040ez 2012Tax Amendment Form 2012

Irs Amended Return Instructions

Irs amended return instructions 3. Irs amended return instructions   Reporting Rental Income, Expenses, and Losses Table of Contents Which Forms To UseSchedule E (Form 1040) Schedule C (Form 1040), Profit or Loss From Business Qualified Joint Venture Limits on Rental LossesAt-Risk Rules Passive Activity Limits Casualties and Thefts Example Figuring the net income or loss for a residential rental activity may involve more than just listing the income and deductions on Schedule E (Form 1040). Irs amended return instructions There are activities which do not qualify to use Schedule E, such as when the activity is not engaged in to make a profit or when you provide substantial services in conjunction with the property. Irs amended return instructions There are also the limitations which may need to be applied if you have a net loss on Schedule E. Irs amended return instructions There are two: (1) the limitation based on the amount of investment you have at risk in your rental activity, and (2) the special limits imposed on passive activities. Irs amended return instructions You may also have a gain or loss related to your rental property from a casualty or theft. Irs amended return instructions This is considered separately from the income and expense information you report on Schedule E. Irs amended return instructions Which Forms To Use The basic form for reporting residential rental income and expenses is Schedule E (Form 1040). Irs amended return instructions However, do not use that schedule to report a not-for-profit activity. Irs amended return instructions See Not Rented for Profit , in chapter 4. Irs amended return instructions There are also other rental situations in which forms other than Schedule E would be used. Irs amended return instructions Schedule E (Form 1040) If you rent buildings, rooms, or apartments, and provide basic services such as heat and light, trash collection, etc. Irs amended return instructions , you normally report your rental income and expenses on Schedule E, Part I. Irs amended return instructions List your total income, expenses, and depreciation for each rental property. Irs amended return instructions Be sure to enter the number of fair rental and personal use days on line 2. Irs amended return instructions If you have more than three rental or royalty properties, complete and attach as many Schedules E as are needed to list the properties. Irs amended return instructions Complete lines 1 and 2 for each property. Irs amended return instructions However, fill in lines 23a through 26 on only one Schedule E. Irs amended return instructions On Schedule E, page 1, line 18, enter the depreciation you are claiming for each property. Irs amended return instructions To find out if you need to attach Form 4562, see Form 4562 , later. Irs amended return instructions If you have a loss from your rental real estate activity, you also may need to complete one or both of the following forms. Irs amended return instructions Form 6198, At-Risk Limitations. Irs amended return instructions See At-Risk Rules , later. Irs amended return instructions Also see Publication 925. Irs amended return instructions Form 8582, Passive Activity Loss Limitations. Irs amended return instructions See Passive Activity Limits , later. Irs amended return instructions Page 2 of Schedule E is used to report income or loss from partnerships, S corporations, estates, trusts, and real estate mortgage investment conduits. Irs amended return instructions If you need to use page 2 of Schedule E, be sure to use page 2 of the same Schedule E you used to enter your rental activity on page 1. Irs amended return instructions Also, include the amount from line 26 (Part I) in the “Total income or (loss)” on line 41 (Part V). Irs amended return instructions Form 4562. Irs amended return instructions   You must complete and attach Form 4562 for rental activities only if you are claiming: Depreciation, including the special depreciation allowance, on property placed in service during 2013; Depreciation on listed property (such as a car), regardless of when it was placed in service; or Any other car expenses, including the standard mileage rate or lease expenses. Irs amended return instructions Otherwise, figure your depreciation on your own worksheet. Irs amended return instructions You do not have to attach these computations to your return, but you should keep them in your records for future reference. Irs amended return instructions   See Publication 946 for information on preparing Form 4562. Irs amended return instructions Schedule C (Form 1040), Profit or Loss From Business Generally, Schedule C is used when you provide substantial services in conjunction with the property or the rental is part of a trade or business as a real estate dealer. Irs amended return instructions Providing substantial services. Irs amended return instructions   If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Irs amended return instructions Use Form 1065, U. Irs amended return instructions S. Irs amended return instructions Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Irs amended return instructions Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. Irs amended return instructions For information, see Publication 334, Tax Guide for Small Business. Irs amended return instructions Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. Irs amended return instructions For a discussion of “substantial services,” see Real Estate Rents in Publication 334, chapter 5. Irs amended return instructions Qualified Joint Venture If you and your spouse each materially participate (see Material participation under Passive Activity Limits, later) as the only members of a jointly owned and operated real estate 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 amended return instructions This election, in most cases, will not increase the total tax owed on the joint return, but it does give each of you credit for social security earnings on which retirement benefits are based and for Medicare coverage if your rental income is subject to self-employment tax. Irs amended return instructions If you make this election, you must report rental real estate income on Schedule E (or Schedule C if you provide substantial services). Irs amended return instructions You will not be required to file Form 1065 for any year the election is in effect. Irs amended return instructions Rental real estate income generally is not included in net earnings from self-employment subject to self-employment tax and generally is subject to the passive activity limits. Irs amended return instructions If you and your spouse filed a Form 1065 for the year prior to the election, the partnership terminates at the end of the tax year immediately preceding the year the election takes effect. Irs amended return instructions For more information on qualified joint ventures, go to IRS. Irs amended return instructions gov and enter “qualified joint venture” in the search box. Irs amended return instructions Limits on Rental Losses If you have a loss from your rental real estate activity, two sets of rules may limit the amount of loss you can deduct. Irs amended return instructions You must consider these rules in the order shown below. Irs amended return instructions Both are discussed in this section. Irs amended return instructions At-risk rules. Irs amended return instructions These rules are applied first if there is investment in your rental real estate activity for which you are not at risk. Irs amended return instructions This applies only if the real property was placed in service after 1986. Irs amended return instructions Passive activity limits. Irs amended return instructions Generally, rental real estate activities are considered passive activities and losses are not deductible unless you have income from other passive activities to offset them. Irs amended return instructions However, there are exceptions. Irs amended return instructions At-Risk Rules You may be subject to the at-risk rules if you have: A loss from an activity carried on as a trade or business or for the production of income, and Amounts invested in the activity for which you are not fully at risk. Irs amended return instructions Losses from holding real property (other than mineral property) placed in service before 1987 are not subject to the at-risk rules. Irs amended return instructions In most cases, any loss from an activity subject to the at-risk rules is allowed only to the extent of the total amount you have at risk in the activity at the end of the tax year. Irs amended return instructions You are considered at risk in an activity to the extent of cash and the adjusted basis of other property you contributed to the activity and certain amounts borrowed for use in the activity. Irs amended return instructions Any loss that is disallowed because of the at-risk limits is treated as a deduction from the same activity in the next tax year. Irs amended return instructions See Publication 925 for a discussion of the at-risk rules. Irs amended return instructions Form 6198. Irs amended return instructions   If you are subject to the at-risk rules, file Form 6198, At-Risk Limitations, with your tax return. Irs amended return instructions Passive Activity Limits In most cases, all rental real estate activities (except those of certain real estate professionals, discussed later) are passive activities. Irs amended return instructions For this purpose, a rental activity is an activity from which you receive income mainly for the use of tangible property, rather than for services. Irs amended return instructions For a discussion of activities that are not considered rental activities, see Rental Activities in Publication 925. Irs amended return instructions Deductions or losses from passive activities are limited. Irs amended return instructions You generally cannot offset income, other than passive income, with losses from passive activities. Irs amended return instructions Nor can you offset taxes on income, other than passive income, with credits resulting from passive activities. Irs amended return instructions Any excess loss or credit is carried forward to the next tax year. Irs amended return instructions Exceptions to the rules for figuring passive activity limits for personal use of a dwelling unit and for rental real estate with active participation are discussed later. Irs amended return instructions For a detailed discussion of these rules, see Publication 925. Irs amended return instructions Real estate professionals. Irs amended return instructions   If you are a real estate professional, complete line 43 of Schedule E. Irs amended return instructions      You qualify as a real estate professional for the tax year if you meet both of the following requirements. Irs amended return instructions More than half of the personal services you perform in all trades or businesses during the tax year are performed in real property trades or businesses in which you materially participate. Irs amended return instructions You perform more than 750 hours of services during the tax year in real property trades or businesses in which you materially participate. Irs amended return instructions If you qualify as a real estate professional, rental real estate activities in which you materially participated are not passive activities. Irs amended return instructions For purposes of determining whether you materially participated in your rental real estate activities, each interest in rental real estate is a separate activity unless you elect to treat all your interests in rental real estate as one activity. Irs amended return instructions   Do not count personal services you perform as an employee in real property trades or businesses unless you are a 5% owner of your employer. Irs amended return instructions You are a 5% owner if you own (or are considered to own) more than 5% of your employer's outstanding stock, or capital or profits interest. Irs amended return instructions   Do not count your spouse's personal services to determine whether you met the requirements listed earlier to qualify as a real estate professional. Irs amended return instructions However, you can count your spouse's participation in an activity in determining if you materially participated. Irs amended return instructions Real property trades or businesses. Irs amended return instructions   A real property trade or business is a trade or business that does any of the following with real property. Irs amended return instructions Develops or redevelops it. Irs amended return instructions Constructs or reconstructs it. Irs amended return instructions Acquires it. Irs amended return instructions Converts it. Irs amended return instructions Rents or leases it. Irs amended return instructions Operates or manages it. Irs amended return instructions Brokers it. Irs amended return instructions Choice to treat all interests as one activity. Irs amended return instructions   If you were a real estate professional and had more than one rental real estate interest during the year, you can choose to treat all the interests as one activity. Irs amended return instructions You can make this choice for any year that you qualify as a real estate professional. Irs amended return instructions If you forgo making the choice for one year, you can still make it for a later year. Irs amended return instructions   If you make the choice, it is binding for the tax year you make it and for any later year that you are a real estate professional. Irs amended return instructions This is true even if you are not a real estate professional in any intervening year. Irs amended return instructions (For that year, the exception for real estate professionals will not apply in determining whether your activity is subject to the passive activity rules. Irs amended return instructions )   See the Instructions for Schedule E for information about making this choice. Irs amended return instructions Material participation. Irs amended return instructions   Generally, you materially participated in an activity for the tax year if you were involved in its operations on a regular, continuous, and substantial basis during the year. Irs amended return instructions For details, see Publication 925 or the Instructions for Schedule C. Irs amended return instructions Participating spouse. Irs amended return instructions   If you are married, determine whether you materially participated in an activity by also counting any participation in the activity by your spouse during the year. Irs amended return instructions Do this even if your spouse owns no interest in the activity or files a separate return for the year. Irs amended return instructions Form 8582. Irs amended return instructions    You may have to complete Form 8582 to figure the amount of any passive activity loss for the current tax year for all activities and the amount of the passive activity loss allowed on your tax return. Irs amended return instructions See Form 8582 not required , later in this chapter, to determine if you must complete Form 8582. Irs amended return instructions   If you are required to complete Form 8582 and are also subject to the at-risk rules, include the amount from Form 6198, line 21 (deductible loss) in column (b) of Form 8582, Worksheet 1 or 3, as required. Irs amended return instructions Exception for Personal Use of Dwelling Unit If you used the rental property as a home during the year, any income, deductions, gain, or loss allocable to such use shall not be taken into account for purposes of the passive activity loss limitation. Irs amended return instructions Instead, follow the rules explained in chapter 5, Personal Use of Dwelling Unit (Including Vacation Home). Irs amended return instructions Exception for Rental Real Estate With Active Participation If you or your spouse actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income. Irs amended return instructions This special allowance is an exception to the general rule disallowing losses in excess of income from passive activities. Irs amended return instructions Similarly, you may be able to offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception. Irs amended return instructions Example. Irs amended return instructions Jane is single and has $40,000 in wages, $2,000 of passive income from a limited partnership, and $3,500 of passive loss from a rental real estate activity in which she actively participated. Irs amended return instructions $2,000 of Jane's $3,500 loss offsets her passive income. Irs amended return instructions The remaining $1,500 loss can be deducted from her $40,000 wages. Irs amended return instructions The special allowance is not available if you were married, lived with your spouse at any time during the year, and are filing a separate return. Irs amended return instructions Active participation. Irs amended return instructions   You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense. Irs amended return instructions Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and other similar decisions. Irs amended return instructions Example. Irs amended return instructions Mike is single and had the following income and losses during the tax year:   Salary $42,300     Dividends 300     Interest 1,400     Rental loss (4,000)   The rental loss was from the rental of a house Mike owned. Irs amended return instructions Mike had advertised and rented the house to the current tenant himself. Irs amended return instructions He also collected the rents, which usually came by mail. Irs amended return instructions All repairs were either made or contracted out by Mike. Irs amended return instructions Although the rental loss is from a passive activity, because Mike actively participated in the rental property management he can use the entire $4,000 loss to offset his other income. Irs amended return instructions Maximum special allowance. Irs amended return instructions   The maximum special allowance is: $25,000 for single individuals and married individuals filing a joint return for the tax year, $12,500 for married individuals who file separate returns for the tax year and lived apart from their spouses at all times during the tax year, and $25,000 for a qualifying estate reduced by the special allowance for which the surviving spouse qualified. Irs amended return instructions   If your modified adjusted gross income (MAGI) is $100,000 or less ($50,000 or less if married filing separately), you can deduct your loss up to the amount specified above. Irs amended return instructions If your MAGI is more than $100,000 (more than $50,000 if married filing separately), your special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately) and your MAGI. Irs amended return instructions   Generally, if your MAGI is $150,000 or more ($75,000 or more if you are married filing separately), there is no special allowance. Irs amended return instructions Modified adjusted gross income (MAGI). Irs amended return instructions   This is your adjusted gross income from Form 1040, U. Irs amended return instructions S. Irs amended return instructions Individual Income Tax Return, line 38, or Form 1040NR, U. Irs amended return instructions S. Irs amended return instructions Nonresident Alien Income Tax Return, line 37, figured without taking into account: The taxable amount of social security or equivalent tier 1 railroad retirement benefits, The deductible contributions to traditional individual retirement accounts (IRAs) and section 501(c)(18) pension plans, The exclusion from income of interest from Series EE and I U. Irs amended return instructions S. Irs amended return instructions savings bonds used to pay higher educational expenses, The exclusion of amounts received under an employer's adoption assistance program, Any passive activity income or loss included on Form 8582, Any rental real estate loss allowed to real estate professionals, Any overall loss from a publicly traded partnership (see Publicly Traded Partnerships (PTPs) in the Instructions for Form 8582), The deduction allowed for one-half of self-employment tax, The deduction allowed for interest paid on student loans, The deduction for qualified tuition and related fees, and The domestic production activities deduction (see the Instructions for Form 8903). Irs amended return instructions Form 8582 not required. Irs amended return instructions   Do not complete Form 8582 if you meet all of the following conditions. Irs amended return instructions Your only passive activities were rental real estate activities in which you actively participated. Irs amended return instructions Your overall net loss from these activities is $25,000 or less ($12,500 or less if married filing separately and you lived apart from your spouse all year). Irs amended return instructions If married filing separately, you lived apart from your spouse all year. Irs amended return instructions You have no prior year unallowed losses from these (or any other passive) activities. Irs amended return instructions You have no current or prior year unallowed credits from passive activities. Irs amended return instructions Your MAGI is $100,000 or less ($50,000 or less if married filing separately and you lived apart from your spouse all year). Irs amended return instructions You do not hold any interest in a rental real estate activity as a limited partner or as a beneficiary of an estate or a trust. Irs amended return instructions   If you meet all of the conditions listed above, your rental real estate activities are not limited by the passive activity rules and you do not have to complete Form 8582. Irs amended return instructions On lines 23a through 23e of your Schedule E, enter the applicable amounts. Irs amended return instructions Casualties and Thefts As a result of a casualty or theft, you may have a loss related to your rental property. Irs amended return instructions You may be able to deduct the loss on your income tax return. Irs amended return instructions Casualty. Irs amended return instructions   This is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. Irs amended return instructions Such events include a storm, fire, or earthquake. Irs amended return instructions Theft. Irs amended return instructions   This is defined as the unlawful taking and removing of your money or property with the intent to deprive you of it. Irs amended return instructions Gain from casualty or theft. Irs amended return instructions   It is also possible to have a gain from a casualty or theft if you receive money, including insurance, that is more than your adjusted basis in the property. Irs amended return instructions Generally, you must report this gain. Irs amended return instructions However, under certain circumstances, you may defer paying tax by choosing to postpone reporting the gain. Irs amended return instructions To do this, you generally must buy replacement property within 2 years after the close of the first tax year in which any part of your gain is realized. Irs amended return instructions In certain circumstances, the replacement period can be greater than 2 years; see Replacement Period in Publication 547 for more information. Irs amended return instructions The cost of the replacement property must be equal to or more than the net insurance or other payment you received. Irs amended return instructions More information. Irs amended return instructions   For information on business and nonbusiness casualty and theft losses, see Publication 547. Irs amended return instructions How to report. Irs amended return instructions    If you had a casualty or theft that involved property used in your rental activity, figure the net gain or loss in Section B of Form 4684, Casualties and Thefts. Irs amended return instructions Follow the Instructions for Form 4684 for where to carry your net gain or loss. Irs amended return instructions Example In February 2008, Marie Pfister bought a rental house for $135,000 (house $120,000 and land $15,000) and immediately began renting it out. Irs amended return instructions In 2013, she rented it all 12 months for a monthly rental fee of $1,125. Irs amended return instructions In addition to her rental income of $13,500 (12 x $1,125), Marie had the following expenses. Irs amended return instructions Mortgage interest $8,000 Fire insurance (1-year policy) 250 Miscellaneous repairs 400 Real estate taxes imposed and paid 500 Maintenance 200 Marie depreciates the residential rental property under MACRS GDS. Irs amended return instructions This means using the straight line method over a recovery period of 27. Irs amended return instructions 5 years. Irs amended return instructions She uses Table 2-2d to find her depreciation percentage. Irs amended return instructions Because she placed the property in service in February 2008, she continues to use that row of Table 2-2d. Irs amended return instructions For year 6, the rate is 3. Irs amended return instructions 636%. Irs amended return instructions Marie figures her net rental income or loss for the house as follows: Total rental income received  ($1,125 × 12) $13,500 Minus: Expenses     Mortgage interest $8,000   Fire insurance 250   Miscellaneous repairs 400   Real estate taxes 500   Maintenance 200   Total expenses 9,350 Balance $4,150 Minus: Depreciation ($120,000 x 3. Irs amended return instructions 636%) 4,363 Net rental (loss) for house ($213)       Marie had a net loss for the year. Irs amended return instructions Because she actively participated in her passive rental real estate activity and her loss was less than $25,000, she can deduct the loss on her return. Irs amended return instructions Marie also meets all of the requirements for not having to file Form 8582. Irs amended return instructions She uses Schedule E, Part I, to report her rental income and expenses. Irs amended return instructions She enters her income, expenses, and depreciation for the house in the column for Property A and enters her loss on line 22. Irs amended return instructions Form 4562 is not required. Irs amended return instructions Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Understanding your CP565 Notice

We gave you an Individual Taxpayer Identification Number (ITIN).

¿Desea ver la versión en español de esta página web?


Effective June 22, 2012, the IRS has made interim changes that affect the Individual Taxpayer Identification Number (ITIN) application process. Some of the information below, including the documentation requirements for individuals seeking an ITIN, has been superseded by these changes. Taxpayers and their representatives should review these changes, which are further explained in these Frequently Asked Questions, before requesting an ITIN.


What you need to do

  • Read your notice carefully. Make sure the name and date of birth we have on record for you is right.
  • You don't have to answer the notice.
  • Use your ITIN in place of a Social Security Number to file a federal tax return or a tax reporting document.

You may want to...


Answers to Common Questions

What is an ITIN?
It is a number for you to use on federal tax documents.

Who needs an ITIN?
A non-citizen who has to file a federal tax return or a tax reporting document and does not qualify for an SSN needs an ITIN.

Can I use an ITIN for identification?
No. It is only for tax purposes. It is not for non-tax purposes.

Can I use my ITIN like a Social Security number (SSN)?
You can use an ITIN like an SSN on federal tax documents. It doesn't, however, allow you to collect Social Security benefits. It doesn't change your immigration status.

Can I claim the Earned Income Tax Credit (EITC) when I file my tax return?
No, individuals filing a tax return with an ITIN can't claim the EITC.

What happens to my ITIN if I become a U.S. citizen?
You can get an SSN when you become a U.S. citizen.

What should I do if I get a Social Security number?
Use your SSN. Stop using your ITIN. Let us know you have an SSN so we can change our records. We will give you credit for taxes withheld under your old ITIN.

I sent you documents when I applied for an ITIN. When will you return them?
We will return your documents within 60 days from your notice's date. Call us at the number on your notice if you don't receive your documents by then.


Tips for next year

Use your ITIN and the name shown on your notice when you file your federal taxes next year. Do the same when you contact us by mail.

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.


Understanding your notice

Reading your notice
Your notice may look different from the sample because the information contained in your notice is tailored to your situation.

Notice CP565, Page 1

Notice CP565, Page 2

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).

Or you may qualify for help from a Low Income Taxpayer Clinic.
 

Page Last Reviewed or Updated: 14-Mar-2014

The Irs Amended Return Instructions

Irs amended return instructions 4. Irs amended return instructions   Student Loan Interest Deduction Table of Contents Introduction Student Loan Interest DefinedQualified Student Loan Qualified Education Expenses Include As Interest Do Not Include As Interest When Must Interest Be Paid Can You Claim the DeductionNo Double Benefit Allowed Figuring the DeductionEffect of the Amount of Your Income on the Amount of Your Deduction Which Worksheet To Use Claiming the Deduction Introduction Generally, personal interest you pay, other than certain mortgage interest, is not deductible on your tax return. Irs amended return instructions However, if your modified adjusted gross income (MAGI) is less than $75,000 ($155,000 if filing a joint return) there is a special deduction allowed for paying interest on a student loan (also known as an education loan) used for higher education. Irs amended return instructions For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return before subtracting any deduction for student loan interest. Irs amended return instructions This deduction can reduce the amount of your income subject to tax by up to $2,500 in 2013. Irs amended return instructions The student loan interest deduction is taken as an adjustment to income. Irs amended return instructions This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). Irs amended return instructions This chapter explains: What type of loan interest you can deduct, Whether you can claim the deduction, What expenses you must have paid with the student loan, Who is an eligible student, How to figure the deduction, and How to claim the deduction. Irs amended return instructions Table 4-1. Irs amended return instructions Student Loan Interest Deduction at a Glance This table summarizes the features of the student loan interest deduction. Irs amended return instructions Do not rely on this table alone. Irs amended return instructions Refer to the text for complete details. Irs amended return instructions Feature   Description Maximum benefit   You can reduce your income subject to tax by up to $2,500. Irs amended return instructions Loan qualifications   Your student loan: •must have been taken out solely to pay qualified education expenses, and •cannot be from a related person or made under a qualified employer plan. Irs amended return instructions Student qualifications   The student must be: •you, your spouse, or your dependent, and  •enrolled at least half-time in a degree program. Irs amended return instructions Time limit on deduction   You can deduct interest paid during the remaining period of your student loan. Irs amended return instructions Limit on modified adjusted gross income (MAGI)   $155,000 if married filing a joint return; $75,000 if single, head of household, or qualifying widow(er). Irs amended return instructions Student Loan Interest Defined Student loan interest is interest you paid during the year on a qualified student loan. Irs amended return instructions It includes both required and voluntary interest payments. Irs amended return instructions Qualified Student Loan This is a loan you took out solely to pay qualified education expenses (defined later) that were: For you, your spouse, or a person who was your dependent when you took out the loan, Paid or incurred within a reasonable period of time before or after you took out the loan, and For education provided during an academic period for an eligible student. Irs amended return instructions Loans from the following sources are not qualified student loans. Irs amended return instructions A related person. Irs amended return instructions A qualified employer plan. Irs amended return instructions Your dependent. Irs amended return instructions   Generally, your dependent is someone who is either a: Qualifying child, or Qualifying relative. Irs amended return instructions You can find more information about dependents in Publication 501. Irs amended return instructions Exceptions. Irs amended return instructions   For purposes of the student loan interest deduction, there are the following exceptions to the general rules for dependents. Irs amended return instructions An individual can be your dependent even if you are the dependent of another taxpayer. Irs amended return instructions An individual can be your dependent even if the individual files a joint return with a spouse. Irs amended return instructions An individual can be your dependent even if the individual had gross income for the year that was equal to or more than the exemption amount for the year ($3,900 for 2013). Irs amended return instructions Reasonable period of time. Irs amended return instructions   Qualified education expenses are treated as paid or incurred within a reasonable period of time before or after you take out the loan if they are paid with the proceeds of student loans that are part of a federal postsecondary education loan program. Irs amended return instructions   Even if not paid with the proceeds of that type of loan, the expenses are treated as paid or incurred within a reasonable period of time if both of the following requirements are met. Irs amended return instructions The expenses relate to a specific academic period, and The loan proceeds are disbursed within a period that begins 90 days before the start of that academic period and ends 90 days after the end of that academic period. Irs amended return instructions   If neither of the above situations applies, the reasonable period of time usually is determined based on all the relevant facts and circumstances. Irs amended return instructions Academic period. Irs amended return instructions   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 amended return instructions 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 amended return instructions Eligible student. Irs amended return instructions   This is a student who was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. Irs amended return instructions Enrolled at least half-time. Irs amended return instructions   A student was enrolled at least half-time if the student was taking at least half the normal full-time work load for his or her course of study. Irs amended return instructions   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. Irs amended return instructions However, the standard may not be lower than any of those established by the U. Irs amended return instructions S. Irs amended return instructions Department of Education under the Higher Education Act of 1965. Irs amended return instructions Related person. Irs amended return instructions   You cannot deduct interest on a loan you get from a related person. Irs amended return instructions Related persons include: Your spouse, Your brothers and sisters, Your half brothers and half sisters, Your ancestors (parents, grandparents, etc. Irs amended return instructions ), Your lineal descendants (children, grandchildren, etc. Irs amended return instructions ), and Certain corporations, partnerships, trusts, and exempt organizations. Irs amended return instructions Qualified employer plan. Irs amended return instructions   You cannot deduct interest on a loan made under a qualified employer plan or under a contract purchased under such a plan. Irs amended return instructions Qualified Education Expenses For purposes of the student loan interest deduction, these expenses are the total costs of attending an eligible educational institution, including graduate school. Irs amended return instructions They include amounts paid for the following items. Irs amended return instructions Tuition and fees. Irs amended return instructions Room and board. Irs amended return instructions Books, supplies, and equipment. Irs amended return instructions Other necessary expenses (such as transportation). Irs amended return instructions The cost of room and board qualifies only to the extent that it is not more than the greater of: The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student, or The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. Irs amended return instructions Eligible educational institution. Irs amended return instructions   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 amended return instructions S. Irs amended return instructions Department of Education. Irs amended return instructions It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Irs amended return instructions   Certain educational institutions located outside the United States also participate in the U. Irs amended return instructions S. Irs amended return instructions Department of Education's Federal Student Aid (FSA) programs. Irs amended return instructions   For purposes of the student loan interest deduction, an eligible educational institution also includes an institution conducting an internship or residency program leading to a degree or certificate from an institution of higher education, a hospital, or a health care facility that offers postgraduate training. Irs amended return instructions   An educational institution must meet the above criteria only during the academic period(s) for which the student loan was incurred. Irs amended return instructions The deductibility of interest on the loan is not affected by the institution's subsequent loss of eligibility. Irs amended return instructions    The educational institution should be able to tell you if it is an eligible educational institution. Irs amended return instructions Adjustments to Qualified Education Expenses You must reduce your qualified education expenses by the total amount paid for them with the following tax-free items. Irs amended return instructions Employer-provided educational assistance. Irs amended return instructions See chapter 11, Employer-Provided Educational Assistance . Irs amended return instructions Tax-free distribution of earnings from a Coverdell education savings account (ESA). Irs amended return instructions See Tax-Free Distributions in chapter 7, Coverdell Education Savings Account. Irs amended return instructions Tax-free distribution of earnings from a qualified tuition program (QTP). Irs amended return instructions See Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program. Irs amended return instructions U. Irs amended return instructions S. Irs amended return instructions savings bond interest that you exclude from income because it is used to pay qualified education expenses. Irs amended return instructions See chapter 10, Education Savings Bond Program . Irs amended return instructions The tax-free part of scholarships and fellowships. Irs amended return instructions See Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Irs amended return instructions Veterans' educational assistance. Irs amended return instructions See Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Irs amended return instructions Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Irs amended return instructions Include As Interest In addition to simple interest on the loan, if all other requirements are met, the items discussed below can be student loan interest. Irs amended return instructions Loan origination fee. Irs amended return instructions   In general, this is a one-time fee charged by the lender when a loan is made. Irs amended return instructions To be deductible as interest, a loan origination fee must be for the use of money rather than for property or services (such as commitment fees or processing costs) provided by the lender. Irs amended return instructions A loan origination fee treated as interest accrues over the term of the loan. Irs amended return instructions   Loan origination fees were not required to be reported on Form 1098-E, Student Loan Interest Statement, for loans made before September 1, 2004. Irs amended return instructions If loan origination fees are not included in the amount reported on your Form 1098-E, you can use any reasonable method to allocate the loan origination fees over the term of the loan. Irs amended return instructions The method shown in the example below allocates equal portions of the loan origination fee to each payment required under the terms of the loan. Irs amended return instructions A method that results in the double deduction of the same portion of a loan origination fee would not be reasonable. Irs amended return instructions Example. Irs amended return instructions In August 2004, Bill took out a student loan for $16,000 to pay the tuition for his senior year of college. Irs amended return instructions The lender charged a 3% loan origination fee ($480) that was withheld from the funds Bill received. Irs amended return instructions Bill began making payments on his student loan in 2013. Irs amended return instructions Because the loan origination fee was not included in his 2013 Form 1098-E, Bill can use any reasonable method to allocate that fee over the term of the loan. Irs amended return instructions Bill's loan is payable in 120 equal monthly payments. Irs amended return instructions He allocates the $480 fee equally over the total number of payments ($480 ÷ 120 months = $4 per month). Irs amended return instructions Bill made 7 payments in 2013, so he paid $28 ($4 × 7) of interest attributable to the loan origination fee. Irs amended return instructions To determine his student loan interest deduction, he will add the $28 to the amount of other interest reported to him on Form 1098-E. Irs amended return instructions Capitalized interest. Irs amended return instructions   This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. Irs amended return instructions Capitalized interest is treated as interest for tax purposes and is deductible as payments of principal are made on the loan. Irs amended return instructions No deduction for capitalized interest is allowed in a year in which no loan payments were made. Irs amended return instructions Interest on revolving lines of credit. Irs amended return instructions   This interest, which includes interest on credit card debt, is student loan interest if the borrower uses the line of credit (credit card) only to pay qualified education expenses. Irs amended return instructions See Qualified Education Expenses , earlier. Irs amended return instructions Interest on refinanced student loans. Irs amended return instructions   This includes interest on both: Consolidated loans—loans used to refinance more than one student loan of the same borrower, and Collapsed loans—two or more loans of the same borrower that are treated by both the lender and the borrower as one loan. Irs amended return instructions    If you refinance a qualified student loan for more than your original loan and you use the additional amount for any purpose other than qualified education expenses, you cannot deduct any interest paid on the refinanced loan. Irs amended return instructions Voluntary interest payments. Irs amended return instructions   These are payments made on a qualified student loan during a period when interest payments are not required, such as when the borrower has been granted a deferment or the loan has not yet entered repayment status. Irs amended return instructions Example. Irs amended return instructions The payments on Roger's student loan were scheduled to begin in June 2012, 6 months after he graduated from college. Irs amended return instructions He began making payments as required. Irs amended return instructions In September 2013, Roger enrolled in graduate school on a full-time basis. Irs amended return instructions He applied for and was granted deferment of his loan payments while in graduate school. Irs amended return instructions Wanting to pay down his student loan as much as possible, he made loan payments in October and November 2013. Irs amended return instructions Even though these were voluntary (not required) payments, Roger can deduct the interest paid in October and November. Irs amended return instructions Allocating Payments Between Interest and Principal The allocation of payments between interest and principal for tax purposes might not be the same as the allocation shown on the Form 1098-E or other statement you receive from the lender or loan servicer. Irs amended return instructions To make the allocation for tax purposes, a payment generally applies first to stated interest that remains unpaid as of the date the payment is due, second to any loan origination fees allocable to the payment, third to any capitalized interest that remains unpaid as of the date the payment is due, and fourth to the outstanding principal. Irs amended return instructions Example. Irs amended return instructions In August 2012, Peg took out a $10,000 student loan to pay the tuition for her senior year of college. Irs amended return instructions The lender charged a 3% loan origination fee ($300) that was withheld from the funds Peg received. Irs amended return instructions The interest (5% simple) on this loan accrued while she completed her senior year and for 6 months after she graduated. Irs amended return instructions At the end of that period, the lender determined the amount to be repaid by capitalizing all accrued but unpaid interest ($625 interest accrued from August 2012 through October 2013) and adding it to the outstanding principal balance of the loan. Irs amended return instructions The loan is payable over 60 months, with a payment of $200. Irs amended return instructions 51 due on the first of each month, beginning November 2013. Irs amended return instructions Peg did not receive a Form 1098-E for 2013 from her lender because the amount of interest she paid did not require the lender to issue an information return. Irs amended return instructions However, she did receive an account statement from the lender that showed the following 2013 payments on her outstanding loan of $10,625 ($10,000 principal + $625 accrued but unpaid interest). Irs amended return instructions Payment Date   Payment   Stated Interest   Principal November 2013   $200. Irs amended return instructions 51   $44. Irs amended return instructions 27   $156. Irs amended return instructions 24 December 2013   $200. Irs amended return instructions 51   $43. Irs amended return instructions 62   $156. Irs amended return instructions 89 Totals   $401. Irs amended return instructions 02   $87. Irs amended return instructions 89   $313. Irs amended return instructions 13 To determine the amount of interest that could be deducted on the loan for 2013, Peg starts with the total amount of stated interest she paid, $87. Irs amended return instructions 89. Irs amended return instructions Next, she allocates the loan origination fee over the term of the loan ($300 ÷ 60 months = $5 per month). Irs amended return instructions A total of $10 ($5 of each of the two principal payments) should be treated as interest for tax purposes. Irs amended return instructions Peg then applies the unpaid capitalized interest ($625) to the two principal payments in the order in which they were made, and determines that the remaining amount of principal of both payments is treated as interest for tax purposes. Irs amended return instructions Assuming that Peg qualifies to take the student loan interest deduction, she can deduct $401. Irs amended return instructions 02 ($87. Irs amended return instructions 89 + $10 + $303. Irs amended return instructions 13). Irs amended return instructions For 2014, Peg will continue to allocate $5 of the loan origination fee to the principal portion of each monthly payment she makes and treat that amount as interest for tax purposes. Irs amended return instructions She also will apply the remaining amount of capitalized interest ($625 − $303. Irs amended return instructions 13 = $321. Irs amended return instructions 87) to the principal payments in the order in which they are made until the balance is zero, and treat those amounts as interest for tax purposes. Irs amended return instructions Do Not Include As Interest You cannot claim a student loan interest deduction for any of the following items. Irs amended return instructions Interest you paid on a loan if, under the terms of the loan, you are not legally obligated to make interest payments. Irs amended return instructions Loan origination fees that are payments for property or services provided by the lender, such as commitment fees or processing costs. Irs amended return instructions Interest you paid on a loan to the extent payments were made through your participation in the National Health Service Corps Loan Repayment Program (the “NHSC Loan Repayment Program”) or certain other loan repayment assistance programs. Irs amended return instructions For more information, see Student Loan Repayment Assistance in chapter 5, Student Loan Cancellations and Repayment Assistance. Irs amended return instructions When Must Interest Be Paid You can deduct all interest you paid during the year on your student loan, including voluntary payments, until the loan is paid off. Irs amended return instructions Can You Claim the Deduction Generally, you can claim the deduction if all of the following requirements are met. Irs amended return instructions Your filing status is any filing status except married filing separately. Irs amended return instructions No one else is claiming an exemption for you on his or her tax return. Irs amended return instructions You are legally obligated to pay interest on a qualified student loan. Irs amended return instructions You paid interest on a qualified student loan. Irs amended return instructions Claiming an exemption for you. Irs amended return instructions   Another taxpayer is claiming an exemption for you if he or she lists your name and other required information on his or her Form 1040 (or Form 1040A), line 6c, or Form 1040NR, line 7c. Irs amended return instructions Example 1. Irs amended return instructions During 2013, Josh paid $600 interest on his qualified student loan. Irs amended return instructions Only he is legally obligated to make the payments. Irs amended return instructions No one claimed an exemption for Josh for 2013. Irs amended return instructions Assuming all other requirements are met, Josh can deduct the $600 of interest he paid on his 2013 Form 1040 or 1040A. Irs amended return instructions Example 2. Irs amended return instructions During 2013, Jo paid $1,100 interest on her qualified student loan. Irs amended return instructions Only she is legally obligated to make the payments. Irs amended return instructions Jo's parents claimed an exemption for her on their 2013 tax return. Irs amended return instructions In this case, neither Jo nor her parents may deduct the student loan interest Jo paid in 2013. Irs amended return instructions Interest paid by others. Irs amended return instructions   If you are the person legally obligated to make interest payments and someone else makes a payment of interest on your behalf, you are treated as receiving the payments from the other person and, in turn, paying the interest. Irs amended return instructions Example 1. Irs amended return instructions Darla obtained a qualified student loan to attend college. Irs amended return instructions After Darla's graduation from college, she worked as an intern for a nonprofit organization. Irs amended return instructions As part of the internship program, the nonprofit organization made an interest payment on behalf of Darla. Irs amended return instructions This payment was treated as additional compensation and reported in box 1 of her Form W-2. Irs amended return instructions Assuming all other qualifications are met, Darla can deduct this payment of interest on her tax return. Irs amended return instructions Example 2. Irs amended return instructions Ethan obtained a qualified student loan to attend college. Irs amended return instructions After graduating from college, the first monthly payment on his loan was due in December. Irs amended return instructions As a gift, Ethan's mother made this payment for him. Irs amended return instructions No one is claiming a dependency exemption for Ethan on his or her tax return. Irs amended return instructions Assuming all other qualifications are met, Ethan can deduct this payment of interest on his tax return. Irs amended return instructions No Double Benefit Allowed You cannot deduct as interest on a student loan any amount that is an allowable deduction under any other provision of the tax law (for example, as home mortgage interest). Irs amended return instructions Figuring the Deduction Your student loan interest deduction for 2013 is generally the smaller of: $2,500, or The interest you paid in 2013. Irs amended return instructions However, the amount determined above may be gradually reduced (phased out) or eliminated based on your filing status and MAGI as explained below. Irs amended return instructions You can use Worksheet 4-1. Irs amended return instructions Student Loan Interest Deduction Worksheet (at the end of this chapter) to figure both your MAGI and your deduction. Irs amended return instructions Form 1098-E. Irs amended return instructions   To help you figure your student loan interest deduction, you should receive Form 1098-E. Irs amended return instructions Generally, an institution (such as a bank or governmental agency) that received interest payments of $600 or more during 2013 on one or more qualified student loans must send Form 1098-E (or acceptable substitute) to each borrower by January 31, 2014. Irs amended return instructions   For qualified student loans taken out before September 1, 2004, the institution is required to include on Form 1098-E only payments of stated interest. Irs amended return instructions Other interest payments, such as certain loan origination fees and capitalized interest, may not appear on the form you receive. Irs amended return instructions However, if you pay qualifying interest that is not included on Form 1098-E, you can also deduct those amounts. Irs amended return instructions See Allocating Payments Between Interest and Principal , earlier. Irs amended return instructions    The lender may ask for a completed Form W-9S, or similar statement to obtain the borrower's name, address, and taxpayer identification number. Irs amended return instructions The form may also be used by the borrower to certify that the student loan was incurred solely to pay for qualified education expenses. Irs amended return instructions Effect of the Amount of Your Income on the Amount of Your Deduction The amount of your student loan interest deduction is phased out (gradually reduced) if your MAGI is between $60,000 and $75,000 ($125,000 and $155,000 if you file a joint return). Irs amended return instructions You cannot take a student loan interest deduction if your MAGI is $75,000 or more ($155,000 or more if you file a joint return). Irs amended return instructions Modified adjusted gross income (MAGI). Irs amended return instructions   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return before subtracting any deduction for student loan interest. Irs amended return instructions However, as discussed below, there may be other modifications. Irs amended return instructions Table 4-2 shows how the amount of your MAGI can affect your student loan interest deduction. Irs amended return instructions Table 4-2. Irs amended return instructions Effect of MAGI on Student Loan Interest Deduction IF your filing status is. Irs amended return instructions . Irs amended return instructions . Irs amended return instructions AND your MAGI is. Irs amended return instructions . Irs amended return instructions . Irs amended return instructions THEN your student loan interest deduction is. Irs amended return instructions . Irs amended return instructions . Irs amended return instructions single,  head of household, or qualifying widow(er) not more than $60,000 not affected by the phaseout. Irs amended return instructions more than $60,000  but less than $75,000 reduced because of the phaseout. Irs amended return instructions $75,000 or more eliminated by the phaseout. Irs amended return instructions married filing joint return not more than $125,000 not affected by the phaseout. Irs amended return instructions more than $125,000 but less than $155,000 reduced because of the phaseout. Irs amended return instructions $155,000 or more eliminated by the phaseout. Irs amended return instructions MAGI when using Form 1040A. Irs amended return instructions   If you file Form 1040A, your MAGI is the AGI on line 22 of that form figured without taking into account any amount on line 18 (student loan interest deduction) and line 19 (tuition and fees deduction). Irs amended return instructions MAGI when using Form 1040. Irs amended return instructions   If you file Form 1040, your MAGI is the AGI on line 38 of that form figured without taking into account any amount on line 33 (student loan interest deduction), line 34 (tuition and fees deduction), or line 35 (domestic production activities deduction), and modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. Irs amended return instructions MAGI when using Form 1040NR. Irs amended return instructions   If you file Form 1040NR, your MAGI is the AGI on line 36 of that form figured without taking into account any amount on line 33 (student loan interest deduction) and line 34 (domestic production activities deduction). Irs amended return instructions MAGI when using Form 1040NR-EZ. Irs amended return instructions   If you file Form 1040NR-EZ, your MAGI is the AGI on line 10 of that form figured without taking into account any amount on line 9 (student loan interest deduction). Irs amended return instructions Phaseout. Irs amended return instructions   If your MAGI is within the range of incomes where the credit must be reduced, you must figure your reduced deduction. Irs amended return instructions To figure the phaseout, multiply your interest deduction (before the phaseout) by a fraction. Irs amended return instructions The numerator is your MAGI minus $60,000 ($125,000 in the case of a joint return). Irs amended return instructions The denominator is $15,000 ($30,000 in the case of a joint return). Irs amended return instructions Subtract the result from your deduction (before the phaseout) to give you the amount you can deduct. Irs amended return instructions Example 1. Irs amended return instructions During 2013 you paid $800 interest on a qualified student loan. Irs amended return instructions Your 2013 MAGI is $145,000 and you are filing a joint return. Irs amended return instructions You must reduce your deduction by $533, figured as follows. Irs amended return instructions   $800 × $145,000 − $125,000  $30,000 = $533   Your reduced student loan interest deduction is $267 ($800 − $533). Irs amended return instructions Example 2. Irs amended return instructions The facts are the same as in Example 1 except that you paid $2,750 interest. Irs amended return instructions Your maximum deduction for 2013 is $2,500. Irs amended return instructions You must reduce your maximum deduction by $1,667, figured as follows. Irs amended return instructions   $2,500 × $145,000 − $125,000  $30,000 = $1,667   In this example, your reduced student loan interest deduction is $833 ($2,500 − $1,667). Irs amended return instructions Which Worksheet To Use Generally, you figure the deduction using the Student Loan Interest Deduction Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR. Irs amended return instructions However, if you are filing Form 2555, Foreign Earned Income, Form 2555-EZ, Foreign Earned Income Exclusion, or Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa, or you are excluding income from sources within Puerto Rico, you must complete Worksheet 4-1. Irs amended return instructions Student Loan Interest Deduction Worksheet at the end of this chapter. Irs amended return instructions Claiming the Deduction The student loan interest deduction is an adjustment to income. Irs amended return instructions To claim the deduction, enter the allowable amount on line 33 (Form 1040), line 18 (Form 1040A), line 33 (Form 1040NR), or line 9 (Form 1040NR-EZ). Irs amended return instructions Worksheet 4-1. Irs amended return instructions Student Loan Interest Deduction Worksheet Use this worksheet instead of the worksheet in the Form 1040 instructions if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico. Irs amended return instructions Before using this worksheet, you must complete Form 1040, lines 7 through 32, plus any amount to be entered on the dotted line next to line 36. Irs amended return instructions 1. Irs amended return instructions Enter the total interest you paid in 2013 on qualified student loans. Irs amended return instructions Do not enter  more than $2,500 1. Irs amended return instructions   2. Irs amended return instructions Enter the amount from Form 1040, line 22 2. Irs amended return instructions       3. Irs amended return instructions Enter the total of the amounts from Form 1040,  lines 23 through 32 3. Irs amended return instructions           4. Irs amended return instructions Enter the total of any amounts entered on the dotted line next to Form 1040, line 36 4. Irs amended return instructions           5. Irs amended return instructions Add lines 3 and 4 5. Irs amended return instructions       6. Irs amended return instructions Subtract line 5 from line 2 6. Irs amended return instructions       7. Irs amended return instructions Enter any foreign earned income exclusion and/or housing  exclusion (Form 2555, line 45, or Form 2555-EZ, line 18) 7. Irs amended return instructions       8. Irs amended return instructions Enter any foreign housing deduction (Form 2555, line 50) 8. Irs amended return instructions       9. Irs amended return instructions Enter the amount of income from Puerto Rico you are excluding 9. Irs amended return instructions       10. Irs amended return instructions Enter the amount of income from American Samoa  you are excluding (Form 4563, line 15) 10. Irs amended return instructions       11. Irs amended return instructions Add lines 6 through 10. Irs amended return instructions This is your modified adjusted gross income 11. Irs amended return instructions   12. Irs amended return instructions Enter the amount shown below for your filing status 12. Irs amended return instructions     •Single, head of household, or qualifying widow(er)—$60,000       •Married filing jointly—$125,000     13. Irs amended return instructions Is the amount on line 11 more than the amount on line 12?       □ No. Irs amended return instructions Skip lines 13 and 14, enter -0- on line 15, and go to line 16. Irs amended return instructions       □ Yes. Irs amended return instructions Subtract line 12 from line 11 13. Irs amended return instructions   14. Irs amended return instructions Divide line 13 by $15,000 ($30,000 if married filing jointly). Irs amended return instructions Enter the result as a decimal  (rounded to at least three places). Irs amended return instructions If the result is 1. Irs amended return instructions 000 or more, enter 1. Irs amended return instructions 000 14. Irs amended return instructions . Irs amended return instructions 15. Irs amended return instructions Multiply line 1 by line 14 15. Irs amended return instructions   16. Irs amended return instructions Student loan interest deduction. Irs amended return instructions Subtract line 15 from line 1. Irs amended return instructions Enter the result here  and on Form 1040, line 33. Irs amended return instructions Do not include this amount in figuring any other  deduction on your return (such as on Schedule A, C, E, etc. Irs amended return instructions ) 16. Irs amended return instructions   Prev  Up  Next   Home   More Online Publications