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Taxact 2012 Return User

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Taxact 2012 Return User

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  • Beware of Fraudulent 'Dietary Supplements'
    Federal regulators continue to warn consumers about tainted, dangerous products that are marketed as dietary supplements. These fraudulent products can cause serious injury or even death. The Food and Drug Administration (FDA) has found nearly 300 fraudulent products, promoted mainly for weight loss, sexual enhancement, and bodybuilding that contain hidden or deceptively labeled ingredients. Remember, FDA cannot test all products on the market to identify those that contain potentially harmful hidden ingredients. Consumers must also be aware of these dangerous products and learn how to identify and avoid them using the warning signs described in this article.
  • Court Orders Internet Marketers of Acai Berry Weight-Loss Pills and 'Colon Cleansers' to Stop Deceptive Advertising and Unfair Billing Practices
    At the request of the Federal Trade Commission, a U.S. district court has ordered the marketers of acai berry supplements, 'colon cleansers,' and other products to temporarily halt an Internet sales scheme that allegedly scammed consumers out of $30 million or more in 2009 alone through deceptive advertising and unfair billing practices. The FTC will seek a permanent prohibition. Since 2007, victimized consumers have flooded law enforcement agencies and the Better Business Bureau with more than 2,800 complaints about the company.
  • Don't Put Your Health in the Hands of Crooks
    It couldn't be easier ordering prescription drugs online with a few clicks of the mouse and having them delivered right to your door, without ever having to see a doctor. But is it safe? Is it legal?
  • FDA Operation Reveals Many Drugs Promoted as 'Canadian' Products Really Originate From Other Countries
    An FDA operation found that nearly half of the imported drugs FDA intercepted from four selected countries were shipped to fill orders that consumers believed they were placing with "Canadian" pharmacies. Of the drugs being promoted as "Canadian," based on accompanying documentation, 85 percent actually came from 27 countries around the globe. A number of these products also origin, safety, and efficacy. We believe that these 'bait and switch' tactics-offering patients one thing and then giving them something else- are misleading to patients and potentially harmful to the public health."
  • FDA Warns Public of Continued Extortion Scam by FDA Impersonators
    The U.S. Food and Drug Administration is warning the public about criminals posing as FDA special agents and other law enforcement personnel as part of a continued international extortion scam. The criminals call the victims who in most cases previously purchased drugs over the Internet or via "telepharmacies" and identify themselves as FDA special agents or other law enforcement officials. The criminals inform the victims that purchasing drugs over the Internet or the telephone is illegal, and that law enforcement action will be pursued unless a fine or fee ranging from $100 to $250,000 is paid. Victims often also have fraudulent transactions placed against their credit cards.
  • FTC Warns Consumers About Scam Artists' Pitch for Potassium Iodide Treatment
    Recent reports of events in Japan are causing scam artists to try to convince consumers that they need potassium iodide pills and drops to protect themselves. Potassium iodide, or KI, can help prevent thyroid cancer, which is one of the biggest risks from contamination with radioactive iodine. However, public health experts agree that U.S. residents should not buy or take potassium iodide unless specifically notified or instructed by public health officials.
  • Medicare Beneficiaries Urged to Be on the Look-out for Phone Scams
    Seniors and people with disabilities should be aware of a scheme that asks Medicare beneficiaries for money and checking account information to help them enroll in a Medicare Prescription Drug Plan. NO Medicare drug plan can ask a person with Medicare for bank account or other personal information over the telephone.
  • VA Warns Veterans of Telephone Prescription Scam
    The Department of Veterans Affairs (VA) is warning Veterans not to give credit card numbers over the phone to callers claiming to update VA prescription information. Veteran Service Organizations have brought to VA's attention that callers are misrepresenting the VA to gain personal information over the phone. They say VA recently changed procedures for dispensing prescriptions and ask for the Veteran's credit card number.

The Taxact 2012 Return User

Taxact 2012 return user 27. Taxact 2012 return user   Tax Benefits for Work-Related Education Table of Contents What's New Introduction Useful Items - You may want to see: Qualifying Work-Related EducationEducation Required by Employer or by Law Education To Maintain or Improve Skills Education To Meet Minimum Requirements Education That Qualifies You for a New Trade or Business What Expenses Can Be DeductedUnclaimed reimbursement. Taxact 2012 return user Transportation Expenses Travel Expenses No Double Benefit Allowed Reimbursements Deducting Business ExpensesSelf-Employed Persons Employees Performing Artists and Fee-Basis Officials Impairment-Related Work Expenses Recordkeeping What's New Standard mileage rate. Taxact 2012 return user  Generally, if you claim a business deduction for work-related education and you drive your car to and from school, the amount you can deduct for miles driven from January 1, 2013, through December 31, 2013, is 56½ cents per mile. Taxact 2012 return user For more information, see Transportation Expenses under What Expenses Can Be Deducted. Taxact 2012 return user Introduction This chapter discusses work-related education expenses that you may be able to deduct as business expenses. Taxact 2012 return user To claim such a deduction, you must: Itemize your deductions on Schedule A (Form 1040) if you are an employee, File Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040) if you are self-employed, and Have expenses for education that meet the requirements discussed under Qualifying Work-Related Education . Taxact 2012 return user If you are an employee and can itemize your deductions, you may be able to claim a deduction for the expenses you pay for your work-related education. Taxact 2012 return user Your deduction will be the amount by which your qualifying work-related education expenses plus other job and certain miscellaneous expenses (except for impairment-related work expenses of disabled individuals) is greater than 2% of your adjusted gross income. Taxact 2012 return user See chapter 28. Taxact 2012 return user If you are self-employed, you deduct your expenses for qualifying work-related education directly from your self-employment income. Taxact 2012 return user Your work-related education expenses may also qualify you for other tax benefits, such as the American opportunity and lifetime learning credits (see chapter 35). Taxact 2012 return user You may qualify for these other benefits even if you do not meet the requirements listed earlier. Taxact 2012 return user Also, keep in mind that your work-related education expenses may qualify you to claim more than one tax benefit. Taxact 2012 return user Generally, you may claim any number of benefits as long as you use different expenses to figure each one. Taxact 2012 return user When you figure your taxes, you may want to compare these tax benefits so you can choose the method(s) that give you the lowest tax liability. Taxact 2012 return user Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 970 Tax Benefits for Education Form (and Instructions) 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses Schedule A (Form 1040) Itemized Deductions Qualifying Work-Related Education You can deduct the costs of qualifying work-related education as business expenses. Taxact 2012 return user This is education that meets at least one of the following two tests. Taxact 2012 return user The education is required by your employer or the law to keep your present salary, status, or job. Taxact 2012 return user The required education must serve a bona fide business purpose of your employer. Taxact 2012 return user The education maintains or improves skills needed in your present work. Taxact 2012 return user However, even if the education meets one or both of the above tests, it is not qualifying work-related education if it: Is needed to meet the minimum educational requirements of your present trade or business, or Is part of a program of study that will qualify you for a new trade or business. Taxact 2012 return user You can deduct the costs of qualifying work-related education as a business expense even if the education could lead to a degree. Taxact 2012 return user Use Figure 27-A, later, as a quick check to see if your education qualifies. Taxact 2012 return user Education Required by Employer or by Law Once you have met the minimum educational requirements for your job, your employer or the law may require you to get more education. Taxact 2012 return user This additional education is qualifying work-related education if all three of the following requirements are met. Taxact 2012 return user It is required for you to keep your present salary, status, or job, The requirement serves a bona fide business purpose of your employer, and The education is not part of a program that will qualify you for a new trade or business. Taxact 2012 return user When you get more education than your employer or the law requires, the additional education can be qualifying work-related education only if it maintains or improves skills required in your present work. Taxact 2012 return user See Education To Maintain or Improve Skills , later. Taxact 2012 return user Example. Taxact 2012 return user You are a teacher who has satisfied the minimum requirements for teaching. Taxact 2012 return user Your employer requires you to take an additional college course each year to keep your teaching job. Taxact 2012 return user If the courses will not qualify you for a new trade or business, they are qualifying work-related education even if you eventually receive a master's degree and an increase in salary because of this extra education. Taxact 2012 return user Education To Maintain or Improve Skills If your education is not required by your employer or the law, it can be qualifying work-related education only if it maintains or improves skills needed in your present work. Taxact 2012 return user This could include refresher courses, courses on current developments, and academic or vocational courses. Taxact 2012 return user Example. Taxact 2012 return user You repair televisions, radios, and stereo systems for XYZ Store. Taxact 2012 return user To keep up with the latest changes, you take special courses in radio and stereo service. Taxact 2012 return user These courses maintain and improve skills required in your work. Taxact 2012 return user Maintaining skills vs. Taxact 2012 return user qualifying for new job. Taxact 2012 return user   Education to maintain or improve skills needed in your present work is not qualifying education if it will also qualify you for a new trade or business. Taxact 2012 return user Education during temporary absence. Taxact 2012 return user   If you stop working for a year or less in order to get education to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. Taxact 2012 return user Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. Taxact 2012 return user Example. Taxact 2012 return user You quit your biology research job to become a full-time biology graduate student for one year. Taxact 2012 return user If you return to work in biology research after completing the courses, the education is related to your present work even if you do not go back to work with the same employer. Taxact 2012 return user Education during indefinite absence. Taxact 2012 return user   If you stop work for more than a year, your absence from your job is considered indefinite. Taxact 2012 return user Education during an indefinite absence, even if it maintains or improves skills needed in the work from which you are absent, is considered to qualify you for a new trade or business. Taxact 2012 return user Therefore, it is not qualifying work-related education. Taxact 2012 return user Education To Meet Minimum Requirements Education you need to meet the minimum educational requirements for your present trade or business is not qualifying work-related education. Taxact 2012 return user The minimum educational requirements are determined by: Laws and regulations, Standards of your profession, trade, or business, and Your employer. Taxact 2012 return user Once you have met the minimum educational requirements that were in effect when you were hired, you do not have to meet any new minimum educational requirements. Taxact 2012 return user This means that if the minimum requirements change after you were hired, any education you need to meet the new requirements can be qualifying education. Taxact 2012 return user You have not necessarily met the minimum educational requirements of your trade or business simply because you are already doing the work. Taxact 2012 return user Example 1. Taxact 2012 return user You are a full-time engineering student. Taxact 2012 return user Although you have not received your degree or certification, you work part-time as an engineer for a firm that will employ you as a full-time engineer after you finish college. Taxact 2012 return user Although your college engineering courses improve your skills in your present job, they are also needed to meet the minimum job requirements for a full-time engineer. Taxact 2012 return user The education is not qualifying work-related education. Taxact 2012 return user Example 2. Taxact 2012 return user You are an accountant and you have met the minimum educational requirements of your employer. Taxact 2012 return user Your employer later changes the minimum educational requirements and requires you to take college courses to keep your job. Taxact 2012 return user These additional courses can be qualifying work-related education because you have already satisfied the minimum requirements that were in effect when you were hired. Taxact 2012 return user Requirements for Teachers States or school districts usually set the minimum educational requirements for teachers. Taxact 2012 return user The requirement is the college degree or the minimum number of college hours usually required of a person hired for that position. Taxact 2012 return user If there are no requirements, you will have met the minimum educational requirements when you become a faculty member. Taxact 2012 return user The determination of whether you are a faculty member of an educational institution must be made on the basis of the particular practices of the institution. Taxact 2012 return user You generally will be considered a faculty member when one or more of the following occurs. Taxact 2012 return user You have tenure. Taxact 2012 return user Your years of service count toward obtaining tenure. Taxact 2012 return user You have a vote in faculty decisions. Taxact 2012 return user Your school makes contributions for you to a retirement plan other than social security or a similar program. Taxact 2012 return user Example 1. Taxact 2012 return user The law in your state requires beginning secondary school teachers to have a bachelor's degree, including 10 professional education courses. Taxact 2012 return user In addition, to keep the job a teacher must complete a fifth year of training within 10 years from the date of hire. Taxact 2012 return user If the employing school certifies to the state Department of Education that qualified teachers cannot be found, the school can hire persons with only 3 years of college. Taxact 2012 return user However, to keep their jobs, these teachers must get a bachelor's degree and the required professional education courses within 3 years. Taxact 2012 return user Under these facts, the bachelor's degree, whether or not it includes the 10 professional education courses, is considered the minimum educational requirement for qualification as a teacher in your state. Taxact 2012 return user If you have all the required education except the fifth year, you have met the minimum educational requirements. Taxact 2012 return user The fifth year of training is qualifying work-related education unless it is part of a program of study that will qualify you for a new trade or business. Taxact 2012 return user Figure 27-A Does Your Work-Related Education Qualify? Please click here for the text description of the image. Taxact 2012 return user Figure 27-A. Taxact 2012 return user Does Your Work-Related Education Qualify?" Example 2. Taxact 2012 return user Assume the same facts as in Example 1 except that you have a bachelor's degree and only six professional education courses. Taxact 2012 return user The additional four education courses can be qualifying work-related education. Taxact 2012 return user Although you do not have all the required courses, you have already met the minimum educational requirements. Taxact 2012 return user Example 3. Taxact 2012 return user Assume the same facts as in Example 1 except that you are hired with only 3 years of college. Taxact 2012 return user The courses you take that lead to a bachelor's degree (including those in education) are not qualifying work-related education. Taxact 2012 return user They are needed to meet the minimum educational requirements for employment as a teacher. Taxact 2012 return user Example 4. Taxact 2012 return user You have a bachelor's degree and you work as a temporary instructor at a university. Taxact 2012 return user At the same time, you take graduate courses toward an advanced degree. Taxact 2012 return user The rules of the university state that you can become a faculty member only if you get a graduate degree. Taxact 2012 return user Also, you can keep your job as an instructor only as long as you show satisfactory progress toward getting this degree. Taxact 2012 return user You have not met the minimum educational requirements to qualify you as a faculty member. Taxact 2012 return user The graduate courses are not qualifying work-related education. Taxact 2012 return user Certification in a new state. Taxact 2012 return user   Once you have met the minimum educational requirements for teachers for your state, you are considered to have met the minimum educational requirements in all states. Taxact 2012 return user This is true even if you must get additional education to be certified in another state. Taxact 2012 return user Any additional education you need is qualifying work-related education. Taxact 2012 return user You have already met the minimum requirements for teaching. Taxact 2012 return user Teaching in another state is not a new trade or business. Taxact 2012 return user Example. Taxact 2012 return user You hold a permanent teaching certificate in State A and are employed as a teacher in that state for several years. Taxact 2012 return user You move to State B and are promptly hired as a teacher. Taxact 2012 return user You are required, however, to complete certain prescribed courses to get a permanent teaching certificate in State B. Taxact 2012 return user These additional courses are qualifying work-related education because the teaching position in State B involves the same general kind of work for which you were qualified in State A. Taxact 2012 return user Education That Qualifies You for a New Trade or Business Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education. Taxact 2012 return user This is true even if you do not plan to enter that trade or business. Taxact 2012 return user If you are an employee, a change of duties that involves the same general kind of work is not a new trade or business. Taxact 2012 return user Example 1. Taxact 2012 return user You are an accountant. Taxact 2012 return user Your employer requires you to get a law degree at your own expense. Taxact 2012 return user You register at a law school for the regular curriculum that leads to a law degree. Taxact 2012 return user Even if you do not intend to become a lawyer, the education is not qualifying because the law degree will qualify you for a new trade or business. Taxact 2012 return user Example 2. Taxact 2012 return user You are a general practitioner of medicine. Taxact 2012 return user You take a 2-week course to review developments in several specialized fields of medicine. Taxact 2012 return user The course does not qualify you for a new profession. Taxact 2012 return user It is qualifying work-related education because it maintains or improves skills required in your present profession. Taxact 2012 return user Example 3. Taxact 2012 return user While working in the private practice of psychiatry, you enter a program to study and train at an accredited psychoanalytic institute. Taxact 2012 return user The program will lead to qualifying you to practice psychoanalysis. Taxact 2012 return user The psychoanalytic training does not qualify you for a new profession. Taxact 2012 return user It is qualifying work-related education because it maintains or improves skills required in your present profession. Taxact 2012 return user Bar or CPA Review Course Review courses to prepare for the bar examination or the certified public accountant (CPA) examination are not qualifying work-related education. Taxact 2012 return user They are part of a program of study that can qualify you for a new profession. Taxact 2012 return user Teaching and Related Duties All teaching and related duties are considered the same general kind of work. Taxact 2012 return user A change in duties in any of the following ways is not considered a change to a new business. Taxact 2012 return user Elementary school teacher to secondary school teacher. Taxact 2012 return user Teacher of one subject, such as biology, to teacher of another subject, such as art. Taxact 2012 return user Classroom teacher to guidance counselor. Taxact 2012 return user Classroom teacher to school administrator. Taxact 2012 return user What Expenses Can Be Deducted If your education meets the requirements described earlier under Qualifying Work-Related Education , you can generally deduct your education expenses as business expenses. Taxact 2012 return user If you are not self-employed, you can deduct business expenses only if you itemize your deductions. Taxact 2012 return user You cannot deduct expenses related to tax-exempt and excluded income. Taxact 2012 return user Deductible expenses. Taxact 2012 return user   The following education expenses can be deducted. Taxact 2012 return user Tuition, books, supplies, lab fees, and similar items. Taxact 2012 return user Certain transportation and travel costs. Taxact 2012 return user Other education expenses, such as costs of research and typing when writing a paper as part of an educational program. Taxact 2012 return user Nondeductible expenses. Taxact 2012 return user   You cannot deduct personal or capital expenses. Taxact 2012 return user For example, you cannot deduct the dollar value of vacation time or annual leave you take to attend classes. Taxact 2012 return user This amount is a personal expense. Taxact 2012 return user Unclaimed reimbursement. Taxact 2012 return user   If you do not claim reimbursement that you are entitled to receive from your employer, you cannot deduct the expenses that apply to that unclaimed reimbursement. Taxact 2012 return user Example. Taxact 2012 return user Your employer agrees to pay your education expenses if you file a voucher showing your expenses. Taxact 2012 return user You do not file a voucher, and you do not get reimbursed. Taxact 2012 return user Because you did not file a voucher, you cannot deduct the expenses on your tax return. Taxact 2012 return user Transportation Expenses If your education qualifies, you can deduct local transportation costs of going directly from work to school. Taxact 2012 return user If you are regularly employed and go to school on a temporary basis, you can also deduct the costs of returning from school to home. Taxact 2012 return user Temporary basis. Taxact 2012 return user   You go to school on a temporary basis if either of the following situations applies to you. Taxact 2012 return user Your attendance at school is realistically expected to last 1 year or less and does indeed last for 1 year or less. Taxact 2012 return user Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Taxact 2012 return user Your attendance is temporary up to the date you determine it will last more than 1 year. Taxact 2012 return user Note. Taxact 2012 return user If you are in either situation (1) or (2), your attendance is not temporary if facts and circumstances indicate otherwise. Taxact 2012 return user Attendance not on a temporary basis. Taxact 2012 return user   You do not go to school on a temporary basis if either of the following situations apply to you. Taxact 2012 return user Your attendance at school is realistically expected to last more than 1 year. Taxact 2012 return user It does not matter how long you actually attend. Taxact 2012 return user Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Taxact 2012 return user Your attendance is not temporary after the date you determine it will last more than 1 year. Taxact 2012 return user Deductible Transportation Expenses If you are regularly employed and go directly from home to school on a temporary basis, you can deduct the round-trip costs of transportation between your home and school. Taxact 2012 return user This is true regardless of the location of the school, the distance traveled, or whether you attend school on nonwork days. Taxact 2012 return user Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. Taxact 2012 return user Transportation expenses do not include amounts spent for travel, meals, or lodging while you are away from home overnight. Taxact 2012 return user Example 1. Taxact 2012 return user You regularly work in a nearby town, and go directly from work to home. Taxact 2012 return user You also attend school every work night for 3 months to take a course that improves your job skills. Taxact 2012 return user Since you are attending school on a temporary basis, you can deduct your daily round-trip transportation expenses in going between home and school. Taxact 2012 return user This is true regardless of the distance traveled. Taxact 2012 return user Example 2. Taxact 2012 return user Assume the same facts as in Example 1 except that on certain nights you go directly from work to school and then home. Taxact 2012 return user You can deduct your transportation expenses from your regular work site to school and then home. Taxact 2012 return user Example 3. Taxact 2012 return user Assume the same facts as in Example 1 except that you attend the school for 9 months on Saturdays, nonwork days. Taxact 2012 return user Since you are attending school on a temporary basis, you can deduct your round-trip transportation expenses in going between home and school. Taxact 2012 return user Example 4. Taxact 2012 return user Assume the same facts as in Example 1 except that you attend classes twice a week for 15 months. Taxact 2012 return user Since your attendance in school is not considered temporary, you cannot deduct your transportation expenses in going between home and school. Taxact 2012 return user If you go directly from work to school, you can deduct the one-way transportation expenses of going from work to school. Taxact 2012 return user If you go from work to home to school and return home, your transportation expenses cannot be more than if you had gone directly from work to school. Taxact 2012 return user Using your car. Taxact 2012 return user   If you use your car (whether you own or lease it) for transportation to school, you can deduct your actual expenses or use the standard mileage rate to figure the amount you can deduct. Taxact 2012 return user The standard mileage rate for miles driven from January 1, 2013, through December 31, 2013 is 56½ cents per mile. Taxact 2012 return user Whichever method you use, you can also deduct parking fees and tolls. Taxact 2012 return user See chapter 26 for information on deducting your actual expenses of using a car. Taxact 2012 return user Travel Expenses You can deduct expenses for travel, meals (see 50% limit on meals , later), and lodging if you travel overnight mainly to obtain qualifying work-related education. Taxact 2012 return user Travel expenses for qualifying work-related education are treated the same as travel expenses for other employee business purposes. Taxact 2012 return user For more information, see chapter 26. Taxact 2012 return user You cannot deduct expenses for personal activities, such as sightseeing, visiting, or entertaining. Taxact 2012 return user Mainly personal travel. Taxact 2012 return user   If your travel away from home is mainly personal, you cannot deduct all of your expenses for travel, meals, and lodging. Taxact 2012 return user You can deduct only your expenses for lodging and 50% of your expenses for meals during the time you attend the qualified educational activities. Taxact 2012 return user   Whether a trip's purpose is mainly personal or educational depends upon the facts and circumstances. Taxact 2012 return user An important factor is the comparison of time spent on personal activities with time spent on educational activities. Taxact 2012 return user If you spend more time on personal activities, the trip is considered mainly educational only if you can show a substantial nonpersonal reason for traveling to a particular location. Taxact 2012 return user Example 1. Taxact 2012 return user John works in Newark, New Jersey. Taxact 2012 return user He traveled to Chicago to take a deductible 1-week course at the request of his employer. Taxact 2012 return user His main reason for going to Chicago was to take the course. Taxact 2012 return user While there, he took a sight-seeing trip, entertained some friends, and took a side trip to Pleasantville for a day. Taxact 2012 return user Since the trip was mainly for business, John can deduct his round-trip airfare to Chicago. Taxact 2012 return user He cannot deduct his transportation expenses of going to Pleasantville. Taxact 2012 return user He can deduct only the meals (subject to the 50% limit) and lodging connected with his educational activities. Taxact 2012 return user Example 2. Taxact 2012 return user Sue works in Boston. Taxact 2012 return user She went to a university in Michigan to take a course for work. Taxact 2012 return user The course is qualifying work-related education. Taxact 2012 return user She took one course, which is one-fourth of a full course load of study. Taxact 2012 return user She spent the rest of the time on personal activities. Taxact 2012 return user Her reasons for taking the course in Michigan were all personal. Taxact 2012 return user Sue's trip is mainly personal because three-fourths of her time is considered personal time. Taxact 2012 return user She cannot deduct the cost of her round-trip train ticket to Michigan. Taxact 2012 return user She can deduct one-fourth of the meals (subject to the 50% limit) and lodging costs for the time she attended the university. Taxact 2012 return user Example 3. Taxact 2012 return user Dave works in Nashville and recently traveled to California to take a 2-week seminar. Taxact 2012 return user The seminar is qualifying work-related education. Taxact 2012 return user While there, he spent an extra 8 weeks on personal activities. Taxact 2012 return user The facts, including the extra 8-week stay, show that his main purpose was to take a vacation. Taxact 2012 return user Dave cannot deduct his round-trip airfare or his meals and lodging for the 8 weeks. Taxact 2012 return user He can deduct only his expenses for meals (subject to the 50% limit) and lodging for the 2 weeks he attended the seminar. Taxact 2012 return user Cruises and conventions. Taxact 2012 return user   Certain cruises and conventions offer seminars or courses as part of their itinerary. Taxact 2012 return user Even if the seminars or courses are work-related, your deduction for travel may be limited. Taxact 2012 return user This applies to: Travel by ocean liner, cruise ship, or other form of luxury water transportation, and Conventions outside the North American area. Taxact 2012 return user   For a discussion of the limits on travel expense deductions that apply to cruises and conventions, see Luxury Water Travel and Conventions in chapter 1 of Publication 463. Taxact 2012 return user 50% limit on meals. Taxact 2012 return user   You can deduct only 50% of the cost of your meals while traveling away from home to obtain qualifying work-related education. Taxact 2012 return user You cannot have been reimbursed for the meals. Taxact 2012 return user   Employees must use Form 2106 or Form 2106-EZ to apply the 50% limit. Taxact 2012 return user Travel as Education You cannot deduct the cost of travel as a form of education even if it is directly related to your duties in your work or business. Taxact 2012 return user Example. Taxact 2012 return user You are a French language teacher. Taxact 2012 return user While on sabbatical leave granted for travel, you traveled through France to improve your knowledge of the French language. Taxact 2012 return user You chose your itinerary and most of your activities to improve your French language skills. Taxact 2012 return user You cannot deduct your travel expenses as education expenses. Taxact 2012 return user This is true even if you spent most of your time learning French by visiting French schools and families, attending movies or plays, and engaging in similar activities. Taxact 2012 return user No Double Benefit Allowed You cannot do either of the following. Taxact 2012 return user Deduct work-related education expenses as business expenses if you benefit from these expenses under any other provision of the law, for example, the tuition and fees deduction (see chapter 35). Taxact 2012 return user Deduct work-related education expenses paid with tax-free scholarship, grant, or employer-provided educational assistance. Taxact 2012 return user See Adjustments to Qualifying Work-Related Education Expenses , next. Taxact 2012 return user Adjustments to Qualifying Work-Related Education Expenses If you pay qualifying work-related education expenses with certain tax-free funds, you cannot claim a deduction for those amounts. Taxact 2012 return user You must reduce the qualifying expenses by the amount of such expenses allocable to the tax-free educational assistance. Taxact 2012 return user For more information, see chapter 12 of Publication 970. Taxact 2012 return user Tax-free educational assistance includes: The tax-free part of scholarships and fellowships (see chapter 1 of Publication 970), The tax-free part of Pell grants (see chapter 1 of Publication 970), The tax-free part of employer-provided educational assistance (see chapter 11 of Publication 970), Veterans' educational assistance (see chapter 1 of Publication 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received for education assistance. Taxact 2012 return user Amounts that do not reduce qualifying work-related education expenses. Taxact 2012 return user   Do not reduce the qualifying work-related education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. Taxact 2012 return user   Also, do not reduce the qualifying work-related education expenses by any scholarship or fellowship reported as income on the student's return or any scholarship which, by its terms, cannot be applied to qualifying work-related education expenses. Taxact 2012 return user Reimbursements How you treat reimbursements depends on the arrangement you have with your employer. Taxact 2012 return user There are two basic types of reimbursement arrangements—accountable plans and nonaccountable plans. Taxact 2012 return user You can tell the type of plan you are reimbursed under by the way the reimbursement is reported on your Form W-2. Taxact 2012 return user For information on how to treat reimbursements under both accountable and nonaccountable plans, see Reimbursements in chapter 26. Taxact 2012 return user Deducting Business Expenses Self-employed persons and employees report business expenses differently. Taxact 2012 return user The following information explains what forms you must use to deduct the cost of your qualifying work-related education as a business expense. Taxact 2012 return user Self-Employed Persons If you are self-employed, report the cost of your qualifying work-related education on the appropriate form used to report your business income and expenses (generally Schedule C, C-EZ, or F). Taxact 2012 return user If your educational expenses include expenses for a car or truck, travel, or meals, report those expenses the same way you report other business expenses for those items. Taxact 2012 return user See the instructions for the form you file for information on how to complete it. Taxact 2012 return user Employees If you are an employee, you can deduct the cost of qualifying work-related education only if you: Did not receive (and were not entitled to receive) any reimbursement from your employer, Were reimbursed under a nonaccountable plan (amount is included in box 1 of Form W-2), or Received reimbursement under an accountable plan, but the amount received was less than your expenses for which you claimed reimbursement. Taxact 2012 return user If either (1) or (2) applies, you can deduct the total qualifying cost. Taxact 2012 return user If (3) applies, you can deduct only the qualifying costs that were more than your reimbursement. Taxact 2012 return user In order to deduct the cost of your qualifying work-related education as a business expense, include the amount with your deduction for any other employee business expenses on Schedule A (Form 1040), line 21. Taxact 2012 return user (Special rules for expenses of certain performing artists and fee-basis officials and for impairment-related work expenses are explained later. Taxact 2012 return user ) This deduction (except for impairment-related work expenses of disabled individuals) is subject to the 2%-of-adjusted-gross-income limit that applies to most miscellaneous itemized deductions. Taxact 2012 return user See chapter 28. Taxact 2012 return user Form 2106 or 2106-EZ. Taxact 2012 return user   To figure your deduction for employee business expenses, including qualifying work-related education, you generally must complete Form 2106 or Form 2106-EZ. Taxact 2012 return user Form not required. Taxact 2012 return user   Do not complete either Form 2106 or Form 2106-EZ if: If amounts included in box 1 of your Form W-2, are not considered reimbursements, and You are not claiming travel, transportation, meal, or entertainment expenses. Taxact 2012 return user   If you meet both of these requirements, enter the expenses directly on Schedule A (Form 1040), line 21. Taxact 2012 return user (Special rules for expenses of certain performing artists and fee-basis officials and for impairment-related work expenses are explained later. Taxact 2012 return user ) Using Form 2106-EZ. Taxact 2012 return user   This form is shorter and easier to use than Form 2106. Taxact 2012 return user Generally, you can use this form if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are using the standard mileage rate if you are claiming vehicle expenses. Taxact 2012 return user   If you do not meet both of these requirements, use Form 2106. Taxact 2012 return user Performing Artists and Fee-Basis Officials If you are a qualified performing artist, or a state (or local) government official who is paid in whole or in part on a fee basis, you can deduct the cost of your qualifying work-related education as an adjustment to gross income rather than as an itemized deduction. Taxact 2012 return user Include the cost of your qualifying work-related education with any other employee business expenses on Form 1040, line 24. Taxact 2012 return user You do not have to itemize your deductions on Schedule A (Form 1040), and, therefore, the deduction is not subject to the 2%-of-adjusted-gross-income limit. Taxact 2012 return user You must complete Form 2106 or 2106-EZ to figure your deduction, even if you meet the requirements described earlier under Form not required . Taxact 2012 return user For more information on qualified performing artists, see chapter 6 of Publication 463. Taxact 2012 return user Impairment-Related Work Expenses If you are disabled and have impairment-related work expenses that are necessary for you to be able to get qualifying work-related education, you can deduct these expenses on Schedule A (Form 1040), line 28. Taxact 2012 return user They are not subject to the 2%-of-adjusted-gross-income limit. Taxact 2012 return user To deduct these expenses, you must complete Form 2106 or 2106-EZ even if you meet the requirements described earlier under Form not required . Taxact 2012 return user For more information on impairment-related work expenses, see chapter 6 of Publication 463. Taxact 2012 return user Recordkeeping You must keep records as proof of any deduction claimed on your tax return. Taxact 2012 return user Generally, you should keep your records for 3 years from the date of filing the tax return and claiming the deduction. Taxact 2012 return user For specific information about keeping records of business expenses, see Recordkeeping in chapter 26. Taxact 2012 return user Prev  Up  Next   Home   More Online Publications