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

Tax For Self Employed

Where File 1040xInstructions For 1040ez 2013How Do I Amend My Tax ReturnFile A 2011 Tax Return OnlineCollege Student Filing TaxesOnline TaxesIrs1040xFiling Income Tax ReturnEz Form OnlineWhere Can I Do My State Taxes Online For Free2012 Irs Tax Forms 1040Free Federal Tax FilingTax Return For Students 2011Free File State ReturnTax Form 1040ezIrs Tax Form 2012 1040aTurbotax 1040x FormFree Income Tax Filing For SeniorsIrs 1040 Ez Form Instructions 2013File 1040x TurbotaxE File 2011 Federal TaxesIrs Forms 1040xFederal Income Tax Rates 20101040ez Filing2011 Tax 1040 EzFillable State Tax FormsForm 1040x Amended ReturnTax Preparation FormsHow To Do A Amended Tax ReturnTax Return Forms 2012How To Fill Out A 1040x1040ez E-fileI Didn T File Taxes For 2012Irs Forms 1040 EzHow To Amend Federal Tax ReturnIrs Form 1040ez Tax TablesHow To File For 2012 TaxesFree H&r Block EfileFiling Taxes With UnemploymentPrintable Tax Forms 2011

Tax For Self Employed

Tax for self employed Publication 15-A - Additional Material Prev  Up  Next   Home   More Online Publications
Español

Tribal Governments

Official information and services from the U.S. government

S

Back to Top

The Tax For Self Employed

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