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File state taxes only online free Publication 509 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionOrdering forms and publications. File state taxes only online free Tax questions. File state taxes only online free Background Information for Using the Tax CalendarsElectronic deposit requirement. File state taxes only online free Legal holidays. File state taxes only online free Statewide legal holidays. File state taxes only online free Future Developments For the latest information about developments related to Publication 509, such as legislation enacted after it was published, go to www. File state taxes only online free irs. File state taxes only online free gov/pub509. File state taxes only online free What's New Publication 1518 discontinued after 2013. File state taxes only online free  Publication 1518, IRS Tax Calendar for Small Businesses and Self-Employed, is discontinued after 2013. File state taxes only online free An IRS Tax Calendar and most of the information previously contained in Publication 1518 can be found at www. File state taxes only online free irs. File state taxes only online free gov/taxcalendar. File state taxes only online free Reminders Photographs of missing children. File state taxes only online free  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. File state taxes only online free Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. File state taxes only online free You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. File state taxes only online free Introduction A tax calendar is a 12-month calendar divided into quarters. File state taxes only online free The calendar gives specific due dates for: Filing tax forms, Paying taxes, and Taking other actions required by federal tax law. File state taxes only online free What does this publication contain?   This publication contains the following. File state taxes only online free A section on how to use the tax calendars. File state taxes only online free Three tax calendars: General Tax Calendar, Employer's Tax Calendar, and Excise Tax Calendar. File state taxes only online free A table showing the semiweekly deposit due dates for payroll taxes for 2014. File state taxes only online free   Most of the due dates discussed in this publication are also included in the IRS Tax Calendar available at www. File state taxes only online free irs. File state taxes only online free gov/taxcalendar. File state taxes only online free Who should use this publication?   Primarily, employers need to use this publication. File state taxes only online free However, the General Tax Calendar has important due dates for all businesses and individuals. File state taxes only online free Anyone who must pay excise taxes may need the Excise Tax Calendar . File state taxes only online free What are the advantages of using a tax calendar?   The following are advantages of using a calendar. File state taxes only online free You do not have to figure the due dates yourself. File state taxes only online free You can file or pay timely and avoid penalties. File state taxes only online free You do not have to adjust the due dates for Saturdays, Sundays, and legal holidays. File state taxes only online free You do not have to adjust the due dates for special banking rules if you use the Employer's Tax Calendar or Excise Tax Calendar . File state taxes only online free Which calendar(s) should I use?   To decide which calendar(s) to use, first look at the General Tax Calendar and highlight the dates that apply to you. File state taxes only online free If you are an employer, also use the Employer's Tax Calendar . File state taxes only online free If you must pay excise taxes, use the Excise Tax Calendar . File state taxes only online free Depending on your situation, you may need to use more than one calendar. File state taxes only online free Table 1. File state taxes only online free Useful Publications IF you are. File state taxes only online free . File state taxes only online free . File state taxes only online free THEN you may need. File state taxes only online free . File state taxes only online free . File state taxes only online free An employer • Publication 15 (Circular E), Employer's Tax Guide. File state taxes only online free  • Publication 15-A, Employer's Supplemental Tax Guide. File state taxes only online free  • Publication 15-B, Employer's Tax Guide to Fringe Benefits. File state taxes only online free  • Publication 926, Household Employer's Tax Guide. File state taxes only online free A farmer • Publication 51 (Circular A), Agricultural Employer's Tax Guide. File state taxes only online free  • Publication 225, Farmer's Tax Guide. File state taxes only online free An individual • Publication 505, Tax Withholding and Estimated Tax. File state taxes only online free Required to pay excise taxes • Publication 510, Excise Taxes. File state taxes only online free What is not in these calendars?   The calendars do not cover the employment or excise tax deposit rules. File state taxes only online free You can find the deposit rules for employment taxes in Publication 15 (Circular E), Employer's Tax Guide. File state taxes only online free The deposit rules for excise taxes are in Publication 510, Excise Taxes, and in the Instructions for Form 720, Quarterly Federal Excise Tax Return. File state taxes only online free In addition, the calendars do not cover filing forms and other requirements for: Estate taxes, Gift taxes, Trusts, Exempt organizations, Certain types of corporations, or Foreign partnerships. File state taxes only online free What other publications and tax forms will I need?   Table 1 lists other publications you may need to order. File state taxes only online free Each calendar lists the forms you may need. File state taxes only online free   See How To Get Tax Help near the end of this publication for information about getting publications and forms. File state taxes only online free Comments and suggestions. File state taxes only online free   We welcome your comments about this publication and your suggestions for future editions. File state taxes only online free   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. File state taxes only online free NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. File state taxes only online free Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. File state taxes only online free   You can send us comments from www. File state taxes only online free irs. File state taxes only online free gov/formspubs. File state taxes only online free Click on More Information and then click on Comment on Tax Forms and Publications. File state taxes only online free   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our forms and publications. File state taxes only online free Ordering forms and publications. File state taxes only online free   Visit www. File state taxes only online free irs. File state taxes only online free gov/formspubs to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. File state taxes only online free Internal Revenue Service 1201 N. File state taxes only online free Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. File state taxes only online free   If you have a tax question, check the information available on IRS. File state taxes only online free gov or call 1-800-829-1040. File state taxes only online free We cannot answer tax questions sent to either of the above addresses. File state taxes only online free Background Information for Using the Tax Calendars The following brief explanations may be helpful to you in using the tax calendars. File state taxes only online free IRS e-services make taxes easier. File state taxes only online free   Now more than ever before, businesses can enjoy the benefits of filing and paying their federal taxes electronically. File state taxes only online free Whether you rely on a tax professional or handle your own taxes, the IRS offers you convenient programs to make taxes easier. File state taxes only online free    You can e-file your Form 1040; certain business tax returns such as Forms 1120, 1120S, and 1065; certain employment tax returns such as Forms 940 and 941; certain excise tax returns such as Forms 720, 2290, and 8849; and Form 1099 and other information returns. File state taxes only online free Visit www. File state taxes only online free irs. File state taxes only online free gov/efile for more information. File state taxes only online free You can pay taxes online or by phone using the Electronic Federal Tax Payments System (EFTPS). File state taxes only online free For detailed information about using this free service, see Electronic deposit requirement below. File state taxes only online free   Use these electronic options to make filing and paying taxes easier. File state taxes only online free For more information on electronic payments, visit the IRS website at www. File state taxes only online free irs. File state taxes only online free gov/e-pay. File state taxes only online free Tax deposits. File state taxes only online free   Some taxes can be paid with the return on which they are reported. File state taxes only online free However, in many cases, you have to deposit the tax before the due date for filing the return. File state taxes only online free Tax deposits are figured for periods of time that are shorter than the time period covered by the return. File state taxes only online free See Publication 15 (Circular E) for the employment tax deposit rules. File state taxes only online free For the excise tax deposit rules, see Publication 510 or the Instructions for Form 720. File state taxes only online free    Electronic deposit requirement. File state taxes only online free   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). File state taxes only online free Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). File state taxes only online free EFTPS is a free service provided by the Department of Treasury. File state taxes only online free If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. File state taxes only online free   To get more information or to enroll in EFTPS, call 1-800-555-4477 (business), 1-800-316-6541 (individual), or 1-800-733-4829 (TDD/TTY). File state taxes only online free You can also visit the EFTPS website at www. File state taxes only online free eftps. File state taxes only online free gov. File state taxes only online free Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide to Getting Started. File state taxes only online free    If you fail to timely, properly, and in full make your federal tax deposit, you may be subject to a failure-to-deposit penalty. File state taxes only online free For an EFTPS deposit to be on time, you must initiate the deposit by 8 p. File state taxes only online free m. File state taxes only online free Eastern time the day before the date the deposit is due. File state taxes only online free Saturday, Sunday, or legal holiday. File state taxes only online free   Generally, if a due date for performing any act for tax purposes falls on a Saturday, Sunday, or legal holiday, the act is considered to be performed timely if it is performed no later than the next day that is not a Saturday, Sunday, or legal holiday. File state taxes only online free The term legal holiday means any legal holiday in the District of Columbia. File state taxes only online free The calendars provided in this publication make the adjustment for Saturdays, Sundays, and legal holidays. File state taxes only online free But you must make any adjustments for statewide legal holidays, as discussed next. File state taxes only online free An exception to this rule for certain excise taxes is noted later under the Excise Tax Calendar. File state taxes only online free Legal holidays. File state taxes only online free   Legal holidays for 2014 are listed below. File state taxes only online free January 1— New Year's Day January 20— Birthday of Martin Luther King, Jr. File state taxes only online free / Inauguration Day February 17— Washington's Birthday April 16— District of Columbia Emancipation Day May 26— Memorial Day July 4— Independence Day September 1— Labor Day October 13— Columbus Day November 11— Veterans Day November 27— Thanksgiving Day December 25— Christmas Day Statewide legal holidays. File state taxes only online free   A statewide legal holiday delays a due date for filing a return only if the IRS office where you are required to file is located in that state. File state taxes only online free A statewide legal holiday does not delay a due date for making a federal tax deposit. File state taxes only online free Extended due date for Forms 1098, 1099, and W-2 if filed electronically. File state taxes only online free   If you file Forms 1098, 1099, or W-2 electronically, your due date for filing them with the IRS or the Social Security Administration (SSA) will be extended to March 31. File state taxes only online free   For 2014, the due date for giving the recipient these forms is January 31. File state taxes only online free   For information about filing Forms 1098, 1099, or W-2G electronically, see Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically. File state taxes only online free For information about filing Form W-2 electronically with the SSA, visit www. File state taxes only online free ssa. File state taxes only online free gov/employer or call 1-800-772-6270. File state taxes only online free Penalties. File state taxes only online free   Whenever possible, you should take action before the listed due date. File state taxes only online free If you are late, you may have to pay a penalty as well as interest on any overdue taxes. File state taxes only online free   Be sure to follow all the tax laws that apply to you. File state taxes only online free In addition to civil penalties, criminal penalties may be imposed for intentionally not paying taxes, for intentionally filing a false return, or for not filing a required return. File state taxes only online free Use of private delivery services. File state taxes only online free   You can use certain private delivery services designated by the IRS to meet the timely mailing as timely filing/paying rule for tax returns and payments. File state taxes only online free These private delivery services include only the following. File state taxes only online free DHL Express (DHL): DHL Same Day Service. File state taxes only online free Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2 Day, FedEx International Priority, and FedEx International First. File state taxes only online free United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. File state taxes only online free M. File state taxes only online free , UPS Worldwide Express Plus, and UPS Worldwide Express. File state taxes only online free   For the IRS mailing address to use if you are using a private delivery service, go to IRS. File state taxes only online free gov and enter “private delivery service” in the search box. File state taxes only online free   The private delivery service can tell you how to get written proof of the mailing date. File state taxes only online free    The U. File state taxes only online free S. File state taxes only online free Postal Service advises that private delivery services cannot deliver items to P. File state taxes only online free O. File state taxes only online free boxes. File state taxes only online free You must use the U. File state taxes only online free S. File state taxes only online free Postal Service to mail any item to an IRS P. File state taxes only online free O. File state taxes only online free box address. File state taxes only online free Prev  Up  Next   Home   More Online Publications
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File state taxes only online free 8. File state taxes only online free   Qualified Tuition Program (QTP) Table of Contents Introduction What Is a Qualified Tuition ProgramDesignated beneficiary. File state taxes only online free Half-time student. File state taxes only online free How Much Can You Contribute Are Distributions TaxableFiguring the Taxable Portion of a Distribution Additional Tax on Taxable Distributions Rollovers and Other TransfersRollovers Changing the Designated Beneficiary Introduction Qualified tuition programs (QTPs) are also called “529 plans. File state taxes only online free ” States may establish and maintain programs that allow you to either prepay or contribute to an account for paying a student's qualified education expenses at a postsecondary institution. File state taxes only online free Eligible educational institutions may establish and maintain programs that allow you to prepay a student's qualified education expenses. File state taxes only online free If you prepay tuition, the student (designated beneficiary) will be entitled to a waiver or a payment of qualified education expenses. File state taxes only online free You cannot deduct either payments or contributions to a QTP. File state taxes only online free For information on a specific QTP, you will need to contact the state agency or eligible educational institution that established and maintains it. File state taxes only online free What is the tax benefit of a QTP. File state taxes only online free   No tax is due on a distribution from a QTP unless the amount distributed is greater than the beneficiary's adjusted qualified education expenses. File state taxes only online free See Are Distributions Taxable , later, for more information. File state taxes only online free    Even if a QTP is used to finance a student's education, the student or the student's parents still may be eligible to claim the American opportunity credit or the lifetime learning credit. File state taxes only online free See Coordination With American Opportunity and Lifetime Learning Credits, later. File state taxes only online free What Is a Qualified Tuition Program A qualified tuition program is a program set up to allow you to either prepay, or contribute to an account established for paying, a student's qualified education expenses at an eligible educational institution. File state taxes only online free QTPs can be established and maintained by states (or agencies or instrumentalities of a state) and eligible educational institutions. File state taxes only online free The program must meet certain requirements. File state taxes only online free Your state government or the eligible educational institution in which you are interested can tell you whether or not they participate in a QTP. File state taxes only online free Qualified education expenses. File state taxes only online free   These are expenses related to enrollment or attendance at an Eligible educational institution (defined later). File state taxes only online free As shown in the following list, to be qualified, some of the expenses must be required by the institution and some must be incurred by students who are enrolled at least half-time. File state taxes only online free See Half-time student , later. File state taxes only online free The following expenses must be required for enrollment or attendance of a Designated beneficiary (defined later) at an eligible educational institution. File state taxes only online free Tuition and fees. File state taxes only online free Books, supplies, and equipment. File state taxes only online free Expenses for special needs services needed by a special needs beneficiary must be incurred in connection with enrollment or attendance at an eligible educational institution. File state taxes only online free Expenses for room and board must be incurred by students who are enrolled at least half-time. File state taxes only online free The expense for room and board qualifies only to the extent that it is not more than the greater of the following two amounts. File state taxes only online free 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. File state taxes only online free The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. File state taxes only online free You will need to contact the eligible educational institution for qualified room and board costs. File state taxes only online free    For tax years after 2010, the purchase of computer technology or equipment is only a qualified education expense if the computer technology or equipment is required for enrollment or attendance at an eligible institution. File state taxes only online free Designated beneficiary. File state taxes only online free   The designated beneficiary is generally the student (or future student) for whom the QTP is intended to provide benefits. File state taxes only online free The designated beneficiary can be changed after participation in the QTP begins. File state taxes only online free If a state or local government or certain tax-exempt organizations purchase an interest in a QTP as part of a scholarship program, the designated beneficiary is the person who receives the interest as a scholarship. File state taxes only online free Half-time student. File state taxes only online free   A student is enrolled “at least half-time” if he or she is enrolled for at least half the full-time academic workload for the course of study the student is pursuing, as determined under the standards of the school where the student is enrolled. File state taxes only online free Eligible educational institution. File state taxes only online free   For purposes of a QTP, this is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. File state taxes only online free S. File state taxes only online free Department of Education. File state taxes only online free It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. File state taxes only online free The educational institution should be able to tell you if it is an eligible educational institution. File state taxes only online free   Certain educational institutions located outside the United States also participate in the U. File state taxes only online free S. File state taxes only online free Department of Education's Federal Student Aid (FSA) programs. File state taxes only online free   How Much Can You Contribute Contributions to a QTP on behalf of any beneficiary cannot be more than the amount necessary to provide for the qualified education expenses of the beneficiary. File state taxes only online free There are no income restrictions on the individual contributors. File state taxes only online free You can contribute to both a QTP and a Coverdell ESA in the same year for the same designated beneficiary. File state taxes only online free   Are Distributions Taxable The part of a distribution representing the amount paid or contributed to a QTP does not have to be included in income. File state taxes only online free This is a return of the investment in the plan. File state taxes only online free The designated beneficiary generally does not have to include in income any earnings distributed from a QTP if the total distribution is less than or equal to adjusted qualified education expenses (defined under Figuring the Taxable Portion of a Distribution , later). File state taxes only online free Earnings and return of investment. File state taxes only online free    You will receive a Form 1099-Q, from each of the programs from which you received a QTP distribution in 2013. File state taxes only online free The amount of your gross distribution (box 1) shown on each form will be divided between your earnings (box 2) and your basis, or return of investment (box 3). File state taxes only online free Form 1099-Q should be sent to you by January 31, 2014. File state taxes only online free Figuring the Taxable Portion of a Distribution To determine if total distributions for the year are more or less than the amount of qualified education expenses, you must compare the total of all QTP distributions for the tax year to the adjusted qualified education expenses. File state taxes only online free Adjusted qualified education expenses. File state taxes only online free   This amount is the total qualified education expenses reduced by any tax-free educational assistance. File state taxes only online free Tax-free educational 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), Veterans' educational assistance (see Veterans' Benefits 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 ), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. File state taxes only online free Taxable earnings. File state taxes only online free   Use the following steps to figure the taxable part. File state taxes only online free Multiply the total distributed earnings shown in box 2 of Form 1099-Q by a fraction. File state taxes only online free The numerator is the adjusted qualified education expenses paid during the year and the denominator is the total amount distributed during the year. File state taxes only online free Subtract the amount figured in (1) from the total distributed earnings. File state taxes only online free The result is the amount the beneficiary must include in income. File state taxes only online free Report it on Form 1040 or Form 1040NR, line 21. File state taxes only online free Example 1. File state taxes only online free In 2007, Sara Clarke's parents opened a savings account for her with a QTP maintained by their state government. File state taxes only online free Over the years they contributed $18,000 to the account. File state taxes only online free The total balance in the account was $27,000 on the date the distribution was made. File state taxes only online free In the summer of 2013, Sara enrolled in college and had $8,300 of qualified education expenses for the rest of the year. File state taxes only online free She paid her college expenses from the following sources. File state taxes only online free   Gift from parents $1,600     Partial tuition scholarship (tax-free) 3,100     QTP distribution 5,300           Before Sara can determine the taxable part of her QTP distribution, she must reduce her total qualified education expenses by any tax-free educational assistance. File state taxes only online free   Total qualified education expenses $8,300     Minus: Tax-free educational assistance −3,100     Equals: Adjusted qualified  education expenses (AQEE) $5,200   Since the remaining expenses ($5,200) are less than the QTP distribution, part of the earnings will be taxable. File state taxes only online free Sara's Form 1099-Q shows that $950 of the QTP distribution is earnings. File state taxes only online free Sara figures the taxable part of the distributed earnings as follows. File state taxes only online free   1. File state taxes only online free $950 (earnings) × $5,200 AQEE  $5,300 distribution           =$932 (tax-free earnings)     2. File state taxes only online free $950 (earnings)−$932 (tax-free earnings)     =$18 (taxable earnings)  Sara must include $18 in income (Form 1040, line 21) as distributed QTP earnings not used for adjusted qualified education expenses. File state taxes only online free Coordination With American Opportunity and Lifetime Learning Credits An American opportunity or lifetime learning credit (education credit) can be claimed in the same year the beneficiary takes a tax-free distribution from a QTP, as long as the same expenses are not used for both benefits. File state taxes only online free This means that after the beneficiary reduces qualified education expenses by tax-free educational assistance, he or she must further reduce them by the expenses taken into account in determining the credit. File state taxes only online free Example 2. File state taxes only online free Assume the same facts as in Example 1 , except that Sara's parents claimed an American opportunity credit of $2,500 (based on $4,000 expenses). File state taxes only online free   Total qualified education expenses $8,300     Minus: Tax-free educational assistance −3,100     Minus: Expenses taken into account  in figuring American opportunity credit −4,000     Equals: Adjusted qualified  education expenses (AQEE) $1,200           The taxable part of the distribution is figured as follows. File state taxes only online free   1. File state taxes only online free $950 (earnings) × $1,200 AQEE  $5,300 distribution           =$215 (tax-free earnings)     2. File state taxes only online free $950 (earnings)−$215 (tax-free earnings)     =$735 (taxable earnings)       Sara must include $735 in income (Form 1040, line 21). File state taxes only online free This represents distributed earnings not used for adjusted qualified education expenses. File state taxes only online free Coordination With Coverdell ESA Distributions If a designated beneficiary receives distributions from both a QTP and a Coverdell ESA in the same year, and the total of these distributions is more than the beneficiary's adjusted qualified higher education expenses, the expenses must be allocated between the distributions. File state taxes only online free For purposes of this allocation, disregard any qualified elementary and secondary education expenses. File state taxes only online free Example 3. File state taxes only online free Assume the same facts as in Example 2 , except that instead of receiving a $5,300 distribution from her QTP, Sara received $4,600 from that account and $700 from her Coverdell ESA. File state taxes only online free In this case, Sara must allocate her $1,200 of adjusted qualified higher education expenses (AQHEE) between the two distributions. File state taxes only online free   $1,200 AQHEE × $700 ESA distribution  $5,300 total distribution = $158 AQHEE (ESA)     $1,200 AQHEE × $4,600 QTP distribution  $5,300 total distribution = $1,042 AQHEE (QTP)   Sara then figures the taxable portion of her Coverdell ESA distribution based on qualified higher education expenses of $158, and the taxable portion of her QTP distribution based on the other $1,042. File state taxes only online free Note. File state taxes only online free If you are required to allocate your expenses between Coverdell ESA and QTP distributions, and you have adjusted qualified elementary and secondary education expenses, see the examples in chapter 7, Coverdell Education Savings Account under Coordination With Qualified Tuition Program (QTP) Distributions . File state taxes only online free Coordination With Tuition and Fees Deduction. File state taxes only online free   A tuition and fees deduction can be claimed in the same year the beneficiary takes a tax-free distribution from a QTP, as long as the same expenses are not used for both benefits. File state taxes only online free Losses on QTP Investments If you have a loss on your investment in a QTP account, you may be able to take the loss on your income tax return. File state taxes only online free You can take the loss only when all amounts from that account have been distributed and the total distributions are less than your unrecovered basis. File state taxes only online free Your basis is the total amount of contributions to that QTP account. File state taxes only online free You claim the loss as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23 (Schedule A (Form 1040NR), line 9), subject to the 2%-of-adjusted-gross-income limit. File state taxes only online free If you have distributions from more than one QTP account during a year, you must combine the information (amount of distribution, basis, etc. File state taxes only online free ) from all such accounts in order to determine your taxable earnings for the year. File state taxes only online free By doing this, the loss from one QTP account reduces the distributed earnings (if any) from any other QTP accounts. File state taxes only online free Example 1. File state taxes only online free In 2013, Taylor received a final distribution of $1,000 from QTP #1. File state taxes only online free His unrecovered basis in that account before the distribution was $3,000. File state taxes only online free If Taylor itemizes his deductions, he can claim the $2,000 loss on Schedule A (Form 1040). File state taxes only online free Example 2. File state taxes only online free Assume the same facts as in Example 1 , except that Taylor also had a distribution of $9,000 from QTP #2, giving him total distributions for 2013 of $10,000. File state taxes only online free His total basis in these distributions was $4,500 ($3,000 for QTP #1 and $1,500 for QTP #2). File state taxes only online free Taylor's adjusted qualified education expenses for 2013 totaled $6,000. File state taxes only online free In order to figure his taxable earnings, Taylor combines the two accounts and determines his taxable earnings as follows. File state taxes only online free   1. File state taxes only online free $10,000 (total distribution)−$4,500 (basis portion of distribution)     = $5,500 (earnings included in distribution)   2. File state taxes only online free $5,500 (earnings) x $6,000 AQEE  $10,000 distribution           =$3,300 (tax-free earnings)     3. File state taxes only online free $5,500 (earnings)−$3,300 (tax-free earnings)     =$2,200 (taxable earnings)                 Taylor must include $2,200 in income on Form 1040, line 21. File state taxes only online free Because Taylor's accounts must be combined, he cannot deduct his $2,000 loss (QTP #1) on Schedule A (Form 1040). File state taxes only online free Instead, the $2,000 loss reduces the total earnings that were distributed, thereby reducing his taxable earnings. File state taxes only online free Additional Tax on Taxable Distributions Generally, if you receive a taxable distribution, you also must pay a 10% additional tax on the amount included in income. File state taxes only online free Exceptions. File state taxes only online free   The 10% additional tax does not apply to distributions: Paid to a beneficiary (or to the estate of the designated beneficiary) on or after the death of the designated beneficiary. File state taxes only online free Made because the designated beneficiary is disabled. File state taxes only online free A person is considered to be disabled if he or she shows proof that he or she cannot do any substantial gainful activity because of his or her physical or mental condition. File state taxes only online free A physician must determine that his or her condition can be expected to result in death or to be of long-continued and indefinite duration. File state taxes only online free Included in income because the designated beneficiary received: A tax-free scholarship or fellowship (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), or Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. File state taxes only online free Made on account of the attendance of the designated beneficiary at a U. File state taxes only online free S. File state taxes only online free military academy (such as the USNA at Annapolis). File state taxes only online free This exception applies only to the extent that the amount of the distribution does not exceed the costs of advanced education (as defined in section 2005(d)(3) of title 10 of the U. File state taxes only online free S. File state taxes only online free Code) attributable to such attendance. File state taxes only online free Included in income only because the qualified education expenses were taken into account in determining the American opportunity or lifetime learning credit (see Coordination With American Opportunity and Lifetime Learning Credits , earlier. File state taxes only online free ) Exception (3) applies only to the extent the distribution is not more than the scholarship, allowance, or payment. File state taxes only online free Figuring the additional tax. File state taxes only online free    Use Part II of Form 5329, to figure any additional tax. File state taxes only online free Report the amount on Form 1040, line 58, or Form 1040NR, line 56. File state taxes only online free Rollovers and Other Transfers Assets can be rolled over or transferred from one QTP to another. File state taxes only online free In addition, the designated beneficiary can be changed without transferring accounts. File state taxes only online free Rollovers Any amount distributed from a QTP is not taxable if it is rolled over to another QTP for the benefit of the same beneficiary or for the benefit of a member of the beneficiary's family (including the beneficiary's spouse). File state taxes only online free An amount is rolled over if it is paid to another QTP within 60 days after the date of the distribution. File state taxes only online free Do not report qualifying rollovers (those that meet the above criteria) anywhere on Form 1040 or 1040NR. File state taxes only online free These are not taxable distributions. File state taxes only online free Members of the beneficiary's family. File state taxes only online free   For these purposes, the beneficiary's family includes the beneficiary's spouse and the following other relatives of the beneficiary. File state taxes only online free Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them. File state taxes only online free Brother, sister, stepbrother, or stepsister. File state taxes only online free Father or mother or ancestor of either. File state taxes only online free Stepfather or stepmother. File state taxes only online free Son or daughter of a brother or sister. File state taxes only online free Brother or sister of father or mother. File state taxes only online free Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law. File state taxes only online free The spouse of any individual listed above. File state taxes only online free First cousin. File state taxes only online free Example. File state taxes only online free When Aaron graduated from college last year he had $5,000 left in his QTP. File state taxes only online free He wanted to give this money to his younger brother, who was in junior high school. File state taxes only online free In order to avoid paying tax on the distribution of the amount remaining in his account, Aaron contributed the same amount to his brother's QTP within 60 days of the distribution. File state taxes only online free If the rollover is to another QTP for the same beneficiary, only one rollover is allowed within 12 months of a previous transfer to any QTP for that designated beneficiary. File state taxes only online free Changing the Designated Beneficiary There are no income tax consequences if the designated beneficiary of an account is changed to a member of the beneficiary's family. File state taxes only online free See Members of the beneficiary's family , earlier. File state taxes only online free Example. File state taxes only online free Assume the same situation as in the last example. File state taxes only online free Instead of closing his QTP and paying the distribution into his brother's QTP, Aaron could have instructed the trustee of his account to simply change the name of the beneficiary on his account to that of his brother. File state taxes only online free Prev  Up  Next   Home   More Online Publications