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Form 1040x

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Form 1040x

Form 1040x 1. Form 1040x   Filing Information Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Filing RequirementsWhen To File and Pay Foreign Currency Does My Return Have To Be On Paper? Where To File Nonresident Alien Spouse Treated as a ResidentSocial Security Number (SSN) How To Make the Choice Suspending the Choice Ending the Choice Estimated Tax Other Forms You May Have To File Topics - This chapter discusses: Whether you have to file a return, When to file your return and pay any tax due, How to treat foreign currency, How to file electronically, Where to file your return, When you can treat your nonresident alien spouse as a resident, and When you may have to make estimated tax payments. Form 1040x Useful Items - You may want to see: Publication 3 Armed Forces' Tax Guide 501 Exemptions, Standard Deduction, and Filing Information 505 Tax Withholding and Estimated Tax 519 U. Form 1040x S. Form 1040x Tax Guide for Aliens 970 Tax Benefits for Education Form (and Instructions) 1040-ES Estimated Tax for Individuals 1040X Amended U. Form 1040x S. Form 1040x Individual Income Tax Return 2350 Application for Extension of Time To File U. Form 1040x S. Form 1040x Income Tax Return 2555 Foreign Earned Income 2555-EZ Foreign Earned Income Exclusion 4868 Application for Automatic Extension of Time To File U. Form 1040x S. Form 1040x Individual Income Tax Return 8822 Change of Address See chapter 7 for information about getting these publications and forms. Form 1040x Filing Requirements If you are a U. Form 1040x S. Form 1040x citizen or resident alien, the rules for filing income, estate, and gift tax returns and for paying estimated tax are generally the same whether you are in the United States or abroad. Form 1040x Your income, filing status, and age generally determine whether you must file an income tax return. Form 1040x Generally, you must file a return for 2013 if your gross income from worldwide sources is at least the amount shown for your filing status in the following table. Form 1040x Filing Status*   Amount Single $10,000 65 or older $11,500 Head of household $12,850 65 or older $14,350 Qualifying widow(er) $16,100 65 or older $17,300 Married filing jointly $20,000 Not living with spouse at end of year $3,900 One spouse 65 or older $21,200 Both spouses 65 or older $22,400 Married filing separately $3,900 *If you are the dependent of another taxpayer, see the instructions for Form 1040 for more information on whether you must file a return. Form 1040x Gross income. Form 1040x   This includes all income you receive in the form of money, goods, property, and services that is not exempt from tax. Form 1040x   For purposes of determining whether you must file a return, gross income includes any income that you can exclude as foreign earned income or as a foreign housing amount. Form 1040x If you are self-employed, your gross income includes the amount on Part I, line 7 of Schedule C (Form 1040), Profit or Loss From Business, or line 1 of Schedule C-EZ (Form 1040), Net Profit From Business. Form 1040x Self-employed individuals. Form 1040x   If your net earnings from self-employment are $400 or more, you must file a return even if your gross income is below the amount listed for your filing status in the table shown earlier. Form 1040x Net earnings from self-employment are defined in Publication 334, Tax Guide for Small Business. Form 1040x 65 or older. Form 1040x   You are considered to be age 65 on the day before your 65th birthday. Form 1040x For example, if your 65th birthday is on January 1, 2014, you are considered 65 for 2013. Form 1040x Residents of U. Form 1040x S. Form 1040x possessions. Form 1040x   If you are (or were) a bona fide resident of a U. Form 1040x S. Form 1040x possession, you may be required to file Form 8898, Statement for Individuals Who Begin or End Bona Fide Residence in a U. Form 1040x S. Form 1040x Possession. Form 1040x See the instructions for the form for more information. Form 1040x When To File and Pay If you file on a calendar year basis, the due date for filing your return is April 15 of the following year. Form 1040x If you file on a fiscal year basis (a year ending on the last day of any month except December), the due date is 3 months and 15 days after the close of your fiscal year. Form 1040x In general, the tax shown on your return should be paid by the due date of the return, without regard to any extension of time for filing the return. Form 1040x When the due date for doing any act for tax purposes—filing a return, paying taxes, etc. Form 1040x — falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day. Form 1040x A tax return delivered by the U. Form 1040x S. Form 1040x mail or a designated delivery service that is postmarked or dated by the delivery service on or before the due date is considered to have been filed on or before that date. Form 1040x See your Form 1040 or Form 1040A instructions for a list of designated delivery services. Form 1040x Foreign wire transfers. Form 1040x   If you have a U. Form 1040x S. Form 1040x bank account, you can use: EFTPS (Electronic Federal Tax Payment System), or Federal Tax Application (same-day wire transfer). Form 1040x If you do not have a U. Form 1040x S. Form 1040x bank account, ask if your financial institution has a U. Form 1040x S. Form 1040x affiliate that can help you make same-day wire transfers. Form 1040x   For more information, visit www. Form 1040x eftps. Form 1040x gov. Form 1040x Extensions You can get an extension of time to file your return. Form 1040x In some circumstances, you also can get an extension of time to file and pay any tax due. Form 1040x However, if you pay the tax due after the regular due date, interest will be charged from the regular due date until the date the tax is paid. Form 1040x This publication discusses four extensions: an automatic 2-month extension, an automatic 6-month extension, an additional extension for taxpayers out of the country, and an extension of time to meet tests. Form 1040x If you served in a combat zone or qualified hazardous duty area, see Publication 3 for a discussion of extensions of deadlines. Form 1040x Automatic 2-month extension. Form 1040x   You are allowed an automatic 2-month extension to file your return and pay federal income tax if you are a U. Form 1040x S. Form 1040x citizen or resident alien, and on the regular due date of your return: You are living outside the United States and Puerto Rico and your main place of business or post of duty is outside the United States and Puerto Rico, or You are in military or naval service on duty outside the United States and Puerto Rico. Form 1040x   If you use a calendar year, the regular due date of your return is April 15. Form 1040x Even if you are allowed an extension, you will have to pay interest on any tax not paid by the regular due date of your return. Form 1040x Married taxpayers. Form 1040x   If you file a joint return, either you or your spouse can qualify for the automatic extension. Form 1040x If you and your spouse file separate returns, this automatic extension applies only to the spouse who qualifies for it. Form 1040x How to get the extension. Form 1040x   To use this automatic 2-month extension, you must attach a statement to your return explaining which of the two situations listed earlier qualified you for the extension. Form 1040x Automatic 6-month extension. Form 1040x   If you are not able to file your return by the due date, you generally can get an automatic 6-month extension of time to file (but not of time to pay). Form 1040x To get this automatic extension, you must file a paper Form 4868 or use IRS e-file (electronic filing). Form 1040x For more information about filing electronically, see E-file options , later. Form 1040x   The form must show your properly estimated tax liability based on the information available to you. Form 1040x    You may not be eligible. Form 1040x You cannot use the automatic 6-month extension of time to file if: You want the IRS to figure your tax, or You are under a court order to file by the regular due date. Form 1040x E-file options. Form 1040x    You can use e-file to get an extension of time to file. Form 1040x You can either file Form 4868 electronically or you can pay part or all of your estimate of tax due using a credit or debit card. Form 1040x   First, complete Form 4868 to use as a worksheet. Form 1040x If you think you may owe tax when you file your return, use Part II of the form to estimate your balance due. Form 1040x    Then, do one of the following. Form 1040x E-file Form 4868. Form 1040x You can use a tax software package with your personal computer or a tax professional to file Form 4868 electronically. Form 1040x You will need to provide certain information from your tax return for 2012. Form 1040x If you wish to make a payment by electronic funds withdrawal, see the instructions for Form 4868. Form 1040x If you e-file Form 4868, do not also send a paper Form 4868. Form 1040x E-file and pay by credit or debit card. Form 1040x You can get an extension by paying part or all of your estimate of tax due by using a credit or debit card. Form 1040x You can do this by phone or over the Internet. Form 1040x If you do this, you do not file Form 4868. Form 1040x For more information, see the instructions for your tax return. Form 1040x When to file. Form 1040x   Generally, you must request the 6-month extension by the regular due date of your return. Form 1040x Previous 2-month extension. Form 1040x   If you cannot file your return within the automatic 2-month extension period, you generally can get an additional 4 months to file your return, for a total of 6 months. Form 1040x The 2-month period and the 6-month period start at the same time. Form 1040x You have to request the additional 4 months by the new due date allowed by the 2-month extension. Form 1040x   The additional 4 months of time to file (unlike the original 2-month extension) is not an extension of time to pay. Form 1040x You must make an accurate estimate of your tax based on the information available to you. Form 1040x If you find you cannot pay the full amount due with Form 4868, you can still get the extension. Form 1040x You will owe interest on the unpaid amount from the original due date of the return. Form 1040x   You also may be charged a penalty for paying the tax late unless you have reasonable cause for not paying your tax when due. Form 1040x Penalties for paying the tax late are assessed from the original due date of your return, unless you qualify for the automatic 2-month extension. Form 1040x In that situation, penalties for paying late are assessed from the extended due date of the payment (June 15 for calendar year taxpayers). Form 1040x Additional extension of time for taxpayers out of the country. Form 1040x   In addition to the 6-month extension, taxpayers who are out of the country can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). Form 1040x   To request this extension, you must send the Internal Revenue Service a letter explaining the reasons why you need the additional 2 months. Form 1040x Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0045   You will not receive any notification from the Internal Revenue Service unless your request is denied. Form 1040x   The discretionary 2-month additional extension is not available to taxpayers who have an approved extension of time to file on Form 2350, discussed next. Form 1040x Extension of time to meet tests. Form 1040x   You generally cannot get an extension of more than 6 months. Form 1040x However, if you are outside the United States and meet certain requirements, you may be able to get a longer extension. Form 1040x   You can get an extension of more than 6 months to file your tax return if you need the time to meet either the bona fide residence test or the physical presence test to qualify for either the foreign earned income exclusion or the foreign housing exclusion or deduction. Form 1040x The tests, the exclusions, and the deduction are explained in chapter 4. Form 1040x   You should request an extension if all three of the following apply. Form 1040x You are a U. Form 1040x S. Form 1040x citizen or resident alien. Form 1040x You expect to meet either the bona fide residence test or the physical presence test, but not until after your tax return is due. Form 1040x Your tax home is in a foreign country (or countries) throughout your period of bona fide residence or physical presence, whichever applies. Form 1040x   If you are granted an extension, it generally will be to 30 days beyond the date on which you can reasonably expect to qualify for an exclusion or deduction under either the bona fide residence test or the physical presence test. Form 1040x However, if you have moving expenses that are for services performed in 2 years, you may be granted an extension until after the end of the second year. Form 1040x How to get an extension. Form 1040x   To obtain an extension, file Form 2350 either by giving it to a local IRS representative or other IRS employee or by mailing it to the: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0045   You must file Form 2350 by the due date for filing your return. Form 1040x Generally, if both your tax home and your abode are outside the United States and Puerto Rico on the regular due date of your return and you file on a calendar year basis, the due date for filing your return is June 15. Form 1040x What if tests are not met. Form 1040x   If you obtain an extension and unforeseen events make it impossible for you to meet either the bona fide residence test or the physical presence test, you should file your income tax return as soon as possible because you must pay interest on any tax due after the regular due date of the return (even though an extension was granted). Form 1040x    You should make any request for an extension early, so that if it is denied you still can file your return on time. Form 1040x Otherwise, if you file late and additional tax is due, you may be subject to a penalty. Form 1040x Return filed before test is met. Form 1040x   If you file a return before you meet the bona fide residence test or the physical presence test, you must include all income from both U. Form 1040x S. Form 1040x and foreign sources and pay the tax on that income. Form 1040x If you later meet either of the tests, you can claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction on Form 1040X. Form 1040x Foreign Currency You must express the amounts you report on your U. Form 1040x S. Form 1040x tax return in U. Form 1040x S. Form 1040x dollars. Form 1040x If you receive all or part of your income or pay some or all of your expenses in foreign currency, you must translate the foreign currency into U. Form 1040x S. Form 1040x dollars. Form 1040x How you do this depends on your functional currency. Form 1040x Your functional currency generally is the U. Form 1040x S. Form 1040x dollar unless you are required to use the currency of a foreign country. Form 1040x You must make all federal income tax determinations in your functional currency. Form 1040x The U. Form 1040x S. Form 1040x dollar is the functional currency for all taxpayers except some qualified business units (QBUs). Form 1040x A QBU is a separate and clearly identified unit of a trade or business that maintains separate books and records. Form 1040x Even if you have a QBU, your functional currency is the dollar if any of the following apply. Form 1040x You conduct the business in U. Form 1040x S. Form 1040x dollars. Form 1040x The principal place of business is located in the United States. Form 1040x You choose to or are required to use the U. Form 1040x S. Form 1040x dollar as your functional currency. Form 1040x The business books and records are not kept in the currency of the economic environment in which a significant part of the business activities is conducted. Form 1040x Make all income tax determinations in your functional currency. Form 1040x If your functional currency is the U. Form 1040x S. Form 1040x dollar, you must immediately translate into U. Form 1040x S. Form 1040x dollars all items of income, expense, etc. Form 1040x (including taxes), that you receive, pay, or accrue in a foreign currency and that will affect computation of your income tax. Form 1040x Use the exchange rate prevailing when you receive, pay, or accrue the item. Form 1040x If there is more than one exchange rate, use the one that most properly reflects your income. Form 1040x You can generally get exchange rates from banks and U. Form 1040x S. Form 1040x Embassies. Form 1040x If your functional currency is not the U. Form 1040x S. Form 1040x dollar, make all income tax determinations in your functional currency. Form 1040x At the end of the year, translate the results, such as income or loss, into U. Form 1040x S. Form 1040x dollars to report on your income tax return. Form 1040x Blocked Income You generally must report your foreign income in terms of U. Form 1040x S. Form 1040x dollars and, with one exception (see Fulbright Grant, later), you must pay taxes due on it in U. Form 1040x S. Form 1040x dollars. Form 1040x If, because of restrictions in a foreign country, your income is not readily convertible into U. Form 1040x S. Form 1040x dollars or into other money or property that is readily convertible into U. Form 1040x S. Form 1040x dollars, your income is “blocked” or “deferrable” income. Form 1040x You can report this income in one of two ways: Report the income and pay your federal income tax with U. Form 1040x S. Form 1040x dollars that you have in the United States or in some other country, or Postpone the reporting of the income until it becomes unblocked. Form 1040x If you choose to postpone the reporting of the income, you must file an information return with your tax return. Form 1040x For this information return, you should use another Form 1040 labeled “Report of Deferrable Foreign Income, pursuant to Rev. Form 1040x Rul. Form 1040x 74-351. Form 1040x ” You must declare on the information return that you will include the deferrable income in your taxable income for the year that it becomes unblocked. Form 1040x You also must state that you waive any right to claim that the deferrable income was includible in your income for any earlier year. Form 1040x You must report your income on your information return using the foreign currency in which you received that income. Form 1040x If you have blocked income from more than one foreign country, include a separate information return for each country. Form 1040x Income becomes unblocked and reportable for tax purposes when it becomes convertible, or when it is converted, into U. Form 1040x S. Form 1040x dollars or into other money or property that is convertible into U. Form 1040x S. Form 1040x currency. Form 1040x Also, if you use blocked income for your personal expenses or dispose of it by gift, bequest, or devise, you must treat it as unblocked and reportable. Form 1040x If you have received blocked income on which you have not paid tax, you should check to see whether that income is still blocked. Form 1040x If it is not, you should take immediate steps to pay tax on it, file a declaration or amended declaration of estimated tax, and include the income on your tax return for the year in which the income became unblocked. Form 1040x If you choose to postpone reporting blocked income and in a later tax year you wish to begin including it in gross income although it is still blocked, you must obtain the permission of the IRS to do so. Form 1040x To apply for permission, file Form 3115, Application for Change in Accounting Method. Form 1040x You also must request permission from the IRS on Form 3115 if you have not chosen to defer the reporting of blocked income in the past, but now wish to begin reporting blocked income under the deferred method. Form 1040x See the instructions for Form 3115 for information on changing your accounting method. Form 1040x Fulbright Grant All income must be reported in U. Form 1040x S. Form 1040x dollars. Form 1040x In most cases, the tax also must be paid in U. Form 1040x S. Form 1040x dollars. Form 1040x If, however, at least 70% of your Fulbright grant has been paid in nonconvertible foreign currency (blocked income), you can use the currency of the host country to pay the part of the U. Form 1040x S. Form 1040x tax that is based on the blocked income. Form 1040x Paying U. Form 1040x S. Form 1040x tax in foreign currency. Form 1040x   To qualify for this method of payment, you must prepare a statement that shows the following information. Form 1040x You were a Fulbright grantee and were paid in nonconvertible foreign currency. Form 1040x The total grant you received during the year and the amount you received in nonconvertible foreign currency. Form 1040x At least 70% of the grant was paid in nonconvertible foreign currency. Form 1040x The statement must be certified by the U. Form 1040x S. Form 1040x educational foundation or commission paying the grant or other person having control of grant payments to you. Form 1040x   You should prepare at least two copies of this statement. Form 1040x Attach one copy to your Form 1040 and keep the other copy for identification purposes when you make a tax deposit of nonconvertible foreign currency. Form 1040x Figuring actual tax. Form 1040x   When you prepare your income tax return, you may owe tax or the entire liability may have been satisfied with your estimated tax payments. Form 1040x If you owe tax, figure the part due to (and payable in) the nonconvertible foreign currency by using the following formula. Form 1040x   Adjusted gross income that is blocked income × Total U. Form 1040x S. Form 1040x tax = Tax on blocked income     Total adjusted  gross income     You must attach all of the following to the return. Form 1040x A copy of the certified statement discussed earlier. Form 1040x A detailed statement showing the allocation of tax attributable to amounts received in foreign currency and the rates of exchange used in determining your tax liability in U. Form 1040x S. Form 1040x dollars. Form 1040x The original deposit receipt for any balance of tax due that you paid in nonconvertible foreign currency. Form 1040x Figuring estimated tax on nonconvertible foreign currency. Form 1040x   If you are liable for estimated tax (discussed later), figure the amount you can pay to the IRS in nonconvertible foreign currency using the following formula. Form 1040x   Adjusted gross income that is blocked income × Total estimated U. Form 1040x S. Form 1040x tax = Estimated tax on blocked income     Total adjusted  gross income     If you must pay your host country income tax on your grant, subtract any estimated foreign tax credit that applies to your grant from the estimated tax on the blocked income. Form 1040x Deposit of foreign currency with disbursing officer. Form 1040x   Once you have determined the amount of the actual tax or estimated tax that you can pay in nonconvertible foreign currency, deposit that amount with the disbursing officer of the Department of State in the foreign country in which the foundation or commission paying the grant is located. Form 1040x Estimated tax installments. Form 1040x   You can either deposit the full estimated tax amount before the first installment due date or make four equal payments before the installment due dates. Form 1040x See Estimated Tax , later. Form 1040x Deposit receipt. Form 1040x   Upon accepting the foreign currency, the disbursing officer will give you a receipt in duplicate. Form 1040x The original of this receipt (showing the amount of foreign currency deposited and its equivalent in U. Form 1040x S. Form 1040x dollars) should be attached to your Form 1040 or payment voucher from Form 1040-ES. Form 1040x Keep the copy for your records. Form 1040x Does My Return Have To Be On Paper? IRS e-file (electronic filing) is the fastest, easiest, and most convenient way to file your income tax return electronically. Form 1040x IRS e-file offers accurate, safe, and fast alternatives to filing on paper. Form 1040x IRS computers quickly and automatically check for errors or other missing information. Form 1040x Even returns with a foreign address can be e-filed! How to e-file. Form 1040x   There are three ways you can e-file. Form 1040x Use your personal computer. Form 1040x Use a volunteer. Form 1040x Many programs offering free tax help can e-file your return. Form 1040x Use a tax professional. Form 1040x Most tax professionals can e-file your return. Form 1040x These methods are explained in detail in the instructions for your tax return. Form 1040x Where To File If any of the following situations apply to you, do not file your return with the service center listed for your home state. Form 1040x You claim the foreign earned income exclusion. Form 1040x You claim the foreign housing exclusion or deduction. Form 1040x You live in a foreign country. Form 1040x Instead, use one of the following special addresses. Form 1040x If you are not enclosing a check or money order, file your return with the: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215 USA If you are enclosing a check or money order, file your return with: Internal Revenue Service Center P. Form 1040x O. Form 1040x Box 1303 Charlotte, NC 28201-1303 USA If you do not know where your legal residence is and you do not have a principal place of business in the United States, you can file with the appropriate address listed above. Form 1040x However, you should not file with the addresses listed above if you are a bona fide resident of the U. Form 1040x S. Form 1040x Virgin Islands, Guam, or the Commonwealth of the Northern Mariana Islands during your entire tax year. Form 1040x Resident of U. Form 1040x S. Form 1040x Virgin Islands (USVI). Form 1040x   If you are a bona fide resident of the USVI during your entire tax year, you generally are not required to file a U. Form 1040x S. Form 1040x return. Form 1040x However, you must file a return with the USVI. Form 1040x    Send your return to the:     Virgin Islands Bureau of Internal Revenue 6115 Estate Smith Bay Suite 225 St. Form 1040x Thomas, Virgin Islands 00802 Non-USVI resident with USVI income. Form 1040x   If you are a U. Form 1040x S. Form 1040x citizen or resident alien and you have income from sources in the USVI or income effectively connected with the conduct of a trade or business in the USVI, and you are not a bona fide resident of the USVI during your entire tax year, you must file identical tax returns with the United States and the USVI. Form 1040x File the original return with the United States and file a signed copy of the U. Form 1040x S. Form 1040x return (including all attachments, forms, and schedules) with the Virgin Islands Bureau of Internal Revenue. Form 1040x   You must complete Form 8689, Allocation of Individual Income Tax to the U. Form 1040x S. Form 1040x Virgin Islands, and attach a copy to both your U. Form 1040x S. Form 1040x return and your USVI return. Form 1040x You should file your U. Form 1040x S. Form 1040x return with the address listed under Where To File. Form 1040x   See Publication 570, Tax Guide for Individuals With Income From U. Form 1040x S. Form 1040x Possessions, for information about filing Virgin Islands returns. Form 1040x Resident of Guam. Form 1040x   If you are a bona fide resident of Guam during your entire tax year, you should file a return with Guam. Form 1040x    Send your return to the:     Department of Revenue and Taxation Government of Guam P. Form 1040x O. Form 1040x Box 23607 GMF, GU 96921   However, if you have income from sources within Guam and you are a U. Form 1040x S. Form 1040x citizen or resident alien, but not a bona fide resident of Guam during the entire tax year, you should file a return with the United States. Form 1040x Send your return to the address listed under Where To File. Form 1040x   See Publication 570 for information about filing Guam returns. Form 1040x Resident of the Commonwealth of the Northern Mariana Islands. Form 1040x   If you are a bona fide resident of the Commonwealth of the Northern Mariana Islands (CNMI) during your entire tax year, you should file a return with the Northern Mariana Islands. Form 1040x    Send your return to the:      Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. Form 1040x O. Form 1040x Box 5234, CHRB Saipan, MP 96950   However, if you have income from sources within the CNMI and you are a U. Form 1040x S. Form 1040x citizen or resident alien, but not a bona fide resident of the CNMI during the entire tax year, you should file a return with the United States. Form 1040x Send your return to the address listed under Where To File. Form 1040x   See Publication 570 for information about filing Northern Mariana Islands returns. Form 1040x Nonresident Alien Spouse Treated as a Resident If, at the end of your tax year, you are married and one spouse is a U. Form 1040x S. Form 1040x citizen or a resident alien and the other is a nonresident alien, you can choose to treat the nonresident as a U. Form 1040x S. Form 1040x resident. Form 1040x This includes situations in which one of you is a nonresident alien at the beginning of the tax year and a resident alien at the end of the year and the other is a nonresident alien at the end of the year. Form 1040x If you make this choice, the following two rules apply. Form 1040x You and your spouse are treated, for income tax purposes, as residents for all tax years that the choice is in effect. Form 1040x You must file a joint income tax return for the year you make the choice. Form 1040x This means that neither of you can claim under any tax treaty not to be a U. Form 1040x S. Form 1040x resident for a tax year for which the choice is in effect. Form 1040x You can file joint or separate returns in years after the year in which you make the choice. Form 1040x Example 1. Form 1040x Pat Smith, a U. Form 1040x S. Form 1040x citizen, is married to Norman, a nonresident alien. Form 1040x Pat and Norman make the choice to treat Norman as a resident alien by attaching a statement to their joint return. Form 1040x Pat and Norman must report their worldwide income for the year they make the choice and for all later years unless the choice is ended or suspended. Form 1040x Although Pat and Norman must file a joint return for the year they make the choice, they can file either joint or separate returns for later years. Form 1040x Example 2. Form 1040x When Bob and Sharon Williams got married, both were nonresident aliens. Form 1040x In June of last year, Bob became a resident alien and remained a resident for the rest of the year. Form 1040x Bob and Sharon both choose to be treated as resident aliens by attaching a statement to their joint return for last year. Form 1040x Bob and Sharon must report their worldwide income for last year and all later years unless the choice is ended or suspended. Form 1040x Bob and Sharon must file a joint return for last year, but they can file either joint or separate returns for later years. Form 1040x If you do not choose to treat your nonresident alien spouse as a U. Form 1040x S. Form 1040x resident, you may be able to use head of household filing status. Form 1040x To use this status, you must pay more than half the cost of maintaining a household for certain dependents or relatives other than your nonresident alien spouse. Form 1040x For more information, see Publication 501. Form 1040x Social Security Number (SSN) If you choose to treat your nonresident alien spouse as a U. Form 1040x S. Form 1040x resident, your spouse must have either an SSN or an individual taxpayer identification number (ITIN). Form 1040x To get an SSN for a nonresident alien spouse, apply at an office of the U. Form 1040x S. Form 1040x Social Security Administration (SSA) or U. Form 1040x S. Form 1040x consulate. Form 1040x You must complete Form SS-5, Application for a Social Security Card, available at www. Form 1040x socialsecurity. Form 1040x gov or by calling 1-800-772-1213. Form 1040x You must also provide original or certified copies of documents to verify that spouse's age, identity, and citizenship. Form 1040x If the nonresident alien spouse is not eligible to get an SSN, he or she can file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS to apply for an ITIN. Form 1040x How To Make the Choice Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. Form 1040x It should contain the following: A declaration that one spouse was a nonresident alien and the other spouse a U. Form 1040x S. Form 1040x citizen or resident alien on the last day of your tax year and that you choose to be treated as U. Form 1040x S. Form 1040x residents for the entire tax year, and The name, address, and social security number (or individual taxpayer identification number) of each spouse. Form 1040x (If one spouse died, include the name and address of the person making the choice for the deceased spouse. Form 1040x ) You generally make this choice when you file your joint return. Form 1040x However, you also can make the choice by filing a joint amended return on Form 1040X. Form 1040x Attach Form 1040, 1040A, or 1040EZ and print “Amended” across the top of the amended return. Form 1040x If you make the choice with an amended return, you and your spouse also must amend any returns that you may have filed after the year for which you made the choice. Form 1040x You generally must file the amended joint return within 3 years from the date you filed your original U. Form 1040x S. Form 1040x income tax return or 2 years from the date you paid your income tax for that year, whichever is later. Form 1040x Table 1–1. Form 1040x Ending the Choice To Treat Nonresident Alien Spouse as a Resident Revocation   Either spouse can revoke the choice for any tax year. Form 1040x   • The revocation must be made by the due date for filing the tax return for that tax year. Form 1040x   • The spouse who revokes the choice must attach a signed statement declaring that the choice is being revoked. Form 1040x The statement revoking the choice must include the following:     • The name, address, and social security number (or taxpayer identification number) of each spouse. Form 1040x     • The name and address of any person who is revoking the choice for a deceased spouse. Form 1040x     • A list of any states, foreign countries, and possessions that have community property laws in which either spouse is domiciled or where real property is located from which either spouse receives income. Form 1040x   • If the spouse revoking the choice does not have to file a return and does not file a claim for refund, send the statement to the Internal Revenue Service Center where the last joint return was filed. Form 1040x Death   The death of either spouse ends the choice, beginning with the first tax year following the year in which the spouse died. Form 1040x   • If the surviving spouse is a U. Form 1040x S. Form 1040x citizen or resident alien and is entitled to the joint tax rates as a surviving spouse, the choice will not end until the close of the last year for which these joint rates may be used. Form 1040x   • If both spouses die in the same tax year, the choice ends on the first day after the close of the tax year in which the spouses died. Form 1040x Divorce or  Legal separation   A divorce or legal separation ends the choice as of the beginning of the tax year in which the legal separation occurs. Form 1040x Inadequate records   The Internal Revenue Service can end the choice for any tax year that either spouse has failed to keep adequate books, records, and other information necessary to determine the correct income tax liability, or to provide adequate access to those records. Form 1040x Suspending the Choice The choice to be treated as a resident alien does not apply to any later tax year if neither of you is a U. Form 1040x S. Form 1040x citizen or resident alien at any time during the later tax year. Form 1040x Example. Form 1040x Dick Brown was a resident alien on December 31, 2010, and married to Judy, a nonresident alien. Form 1040x They chose to treat Judy as a resident alien and filed a joint 2010 income tax return. Form 1040x On January 10, 2012, Dick became a nonresident alien. Form 1040x Judy had remained a nonresident alien. Form 1040x Because Dick was a resident alien during part of 2012, Dick and Judy can file joint or separate returns for that year. Form 1040x Neither Dick nor Judy was a resident alien at any time during 2013 and their choice is suspended for that year. Form 1040x For 2013, both are treated as nonresident aliens. Form 1040x If Dick becomes a resident alien again in 2014, their choice is no longer suspended and both are treated as resident aliens. Form 1040x Ending the Choice Once made, the choice to be treated as a resident applies to all later years unless suspended (as explained earlier) or ended in one of the ways shown in Table 1-1. Form 1040x If the choice is ended for any of the reasons listed in Table 1-1, neither spouse can make a choice in any later tax year. Form 1040x Estimated Tax The requirements for determining who must pay estimated tax are the same for a U. Form 1040x S. Form 1040x citizen or resident abroad as for a taxpayer in the United States. Form 1040x For current instructions on making estimated tax payments, see Form 1040-ES. Form 1040x If you had a tax liability for 2013, you may have to pay estimated tax for 2014. Form 1040x Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax for 2014 after subtracting your withholding and credits and you expect your withholding and credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return. Form 1040x (The return must cover all 12 months. Form 1040x ) If less than two-thirds of your gross income for 2013 and 2014 is from farming or fishing and your adjusted gross income for 2013 is more than $150,000 ($75,000 if you are married and file separately), substitute 110% for 100% in (2). Form 1040x See Publication 505 for more information. Form 1040x The first installment of estimated tax is due on April 15, 2014. Form 1040x Foreign earned income exclusion. Form 1040x   When figuring your estimated gross income, subtract amounts you expect to exclude under the foreign earned income exclusion and the foreign housing exclusion. Form 1040x In addition, you can reduce your income by your estimated foreign housing deduction. Form 1040x However, you must estimate tax on your nonexcluded income using the tax rates that will apply had you not excluded the income. Form 1040x If the actual amount of the exclusion or deduction is less than you estimate, you may have to pay a penalty for underpayment of estimated tax. Form 1040x   For more information about figuring your estimated tax, see Publication 505. Form 1040x Other Forms You May Have To File FinCEN Form 114 (replaces Form TD F 90-22. Form 1040x 1). Form 1040x   Beginning October 1, 2013, Form 114, Report of Foreign Bank and Financial Accounts (FBAR), must be filed instead of Form TD F 90-22. Form 1040x 1. Form 1040x Form 114 is filed electronically with the Financial Crimes Enforcement Network (FinCEN). Form 1040x See the filing instructions at www. Form 1040x bsaefiling. Form 1040x fincen. Form 1040x treas. Form 1040x gov/main. Form 1040x html. Form 1040x   You must file Form 114 if you had any financial interest in, or signature or other authority over a bank, securities, or other financial account in a foreign country. Form 1040x You do not need to file the report if the assets are with a U. Form 1040x S. Form 1040x military banking facility operated by a financial institution or if the combined assets in the account(s) are $10,000 or less during the entire year. Form 1040x   More information about the filing of Form 114 can be found in the instructions for the form. Form 1040x FinCEN Form 105. Form 1040x   You must file Form 105, Report of International Transportation of Currency or Monetary Instruments, if you physically transport, mail, ship, or cause to be physically transported, mailed, or shipped into or out of the United States, currency or other monetary instruments totaling more than $10,000 at one time. Form 1040x Certain recipients of currency or monetary instruments also must file Form 105. Form 1040x   More information about the filing of Form 105 can be found in the instructions on the back of the form. Form 1040x Form 8938. Form 1040x   You must file Form 8938 to report the ownership of specified foreign financial assets if the total value of those assets exceeds an applicable threshold amount (the “reporting threshold ”). Form 1040x The reporting threshold varies depending on whether you live in the United States, are married, or file a joint income tax return with your spouse. Form 1040x Specified foreign financial assets include any financial account maintained by a foreign financial institution and, to the extent held for investment, any stock, securities, or any other interest in a foreign entity and any financial instrument or contract with an issuer or counterparty that is not a U. Form 1040x S. Form 1040x person. Form 1040x   You may have to pay penalties if you are required to file Form 8938 and fail to do so, or if you have an understatement of tax due to any transaction involving an undisclosed foreign financial asset. Form 1040x   More information about the filing of Form 8938 can be found in the separate instructions for Form 8938. Form 1040x Prev  Up  Next   Home   More Online Publications
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The Form 1040x

Form 1040x 35. Form 1040x   Education Credits Table of Contents Introduction Useful Items - You may want to see: Who Can Claim an Education Credit Qualified Education ExpensesNo Double Benefit Allowed Adjustments to Qualified Education Expenses Introduction For 2013, there are two tax credits available to persons who pay expenses for higher (postsecondary) education. Form 1040x They are: The American opportunity credit, and The lifetime learning credit. Form 1040x The chapter will present an overview of these education credits. Form 1040x To get the detailed information you will need to claim either of the credits, and for examples illustrating that information, see chapters 2 and 3 of Publication 970. Form 1040x Can you claim more than one education credit this year?   For each student, you can choose for any year only one of the credits. Form 1040x For example, if you choose to take the American opportunity credit for a child on your 2013 tax return, you cannot, for that same child, also claim the lifetime learning credit for 2013. Form 1040x   If you are eligible to claim the American opportunity credit and you are also eligible to claim the lifetime learning credit for the same student in the same year, you can choose to claim either credit, but not both. Form 1040x   If you pay qualified education expenses for more than one student in the same year, you can choose to take the American opportunity and the lifetime learning credits on a per-student, per-year basis. Form 1040x This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. Form 1040x Table 35-1. Form 1040x Comparison of Education Credits Caution. Form 1040x You can claim both the American opportunity credit and the lifetime learning credit on the same return—but not for the same student. Form 1040x   American Opportunity Credit Lifetime Learning Credit Maximum credit Up to $2,500 credit per eligible student Up to $2,000 credit per return Limit on modified adjusted gross income (MAGI) $180,000 if married filing jointly;  $90,000 if single, head of household, or qualifying widow(er) $127,000 if married filing jointly;  $63,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable 40% of credit may be refundable Credit limited to the amount of tax you must pay on your taxable income Number of years of postsecondary education Available ONLY if the student had not completed the first 4 years of postsecondary education before 2013 Available for all years of postsecondary education and for courses to acquire or improve job skills Number of tax years credit available Available ONLY for 4 tax years per eligible student (including any year(s) the Hope credit was claimed) Available for an unlimited number of years Type of program required Student must be pursuing a program leading to a degree or other recognized education credential Student does not need to be pursuing a program leading to a degree or other recognized education credential Number of courses Student must be enrolled at least half time for at least one academic period beginning during the tax year Available for one or more courses Felony drug conviction At the end of 2013, the student had not been convicted of a felony for possessing or distributing a controlled substance Felony drug convictions do not make the student ineligible Qualified expenses Tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance Tuition and fees required for enrollment or attendance (including amounts required to be paid to the institution for course-related books, supplies, and equipment) Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Differences between the American opportunity and lifetime learning credits. Form 1040x   There are several differences between these two credits. Form 1040x These differences are summarized in Table 35-1, later. Form 1040x Useful Items - You may want to see: Publication 970 Tax Benefits for Education Form (and Instructions) 8863 Education Credits (American Opportunity and Lifetime Learning Credits) Who Can Claim an Education Credit You may be able to claim an education credit if you, your spouse, or a dependent you claim on your tax return was a student enrolled at or attending an eligible educational institution. Form 1040x The credits are based on the amount of qualified education expenses paid for the student in 2013 for academic periods beginning in 2013 and in the first 3 months of 2014. Form 1040x 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 education credit(s). Form 1040x Academic period. Form 1040x   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. Form 1040x 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. Form 1040x Eligible educational institution. Form 1040x   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. Form 1040x S. Form 1040x Department of Education. Form 1040x It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Form 1040x The educational institution should be able to tell you if it is an eligible educational institution. Form 1040x   Certain educational institutions located outside the United States also participate in the U. Form 1040x S. Form 1040x Department of Education's Federal Student Aid (FSA) programs. Form 1040x Who can claim a dependent's expenses. Form 1040x   If an exemption is allowed as a deduction for any person who claims the student as a dependent, all qualified education expenses of the student are treated as having been paid by that person. Form 1040x Therefore, only that person can claim an education credit for the student. Form 1040x If a student is not claimed as a dependent on another person's tax return, only the student can claim a credit. Form 1040x Expenses paid by a third party. Form 1040x   Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. Form 1040x However, qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. Form 1040x Therefore, you are treated as having paid expenses that were paid by the third party. Form 1040x For more information and an example see Who Can Claim a Dependent's Expenses in Pub. Form 1040x 970, chapter 2 or 3. Form 1040x Who cannot claim a credit. Form 1040x   You cannot take an education credit if any of the following apply. Form 1040x You are claimed as a dependent on another person's tax return, such as your parent's return. Form 1040x Your filing status is married filing separately. Form 1040x You (or your spouse) were a nonresident alien for any part of 2013 and did not elect to be treated as a resident alien for tax purposes. Form 1040x Your MAGI is one of the following. Form 1040x American opportunity credit: $180,000 or more if married filing jointly, or $90,000 or more if single, head of household, or qualifying widow(er). Form 1040x Lifetime learning credit: $127,000 or more if married filing jointly, or $63,000 or more if single, head of household, or qualifying widow(er) . Form 1040x   Generally, your MAGI is the amount on your Form 1040, line 38, or Form 1040A, line 22. Form 1040x However, if you are filing Form 2555, Form 2555–EZ, or Form 4563, or are excluding income from Puerto RIco, add to the amount on your Form 1040, line 38, or Form 1040A, line 22, the amount of income you excluded. Form 1040x For details, see Pub. Form 1040x 970. Form 1040x    Figure 35-A may be helpful in determining if you can claim an education credit on your tax return. Form 1040x The American opportunity credit will always be greater than or equal to the lifetime learning credit for any student who is eligible for both credits. Form 1040x However, if any of the conditions for the American opportunity credit, listed in Table 35-1 earlier, are not met for any student, you cannot take the American opportunity credit for that student. Form 1040x You may be able to take the lifetime learning credit for part or all of that student's qualified education expenses instead. Form 1040x See Pub. Form 1040x 970 for information on other education benefits. Form 1040x Qualified Education Expenses Generally, qualified education expenses are amounts paid in 2013 for tuition and fees required for the student's enrollment or attendance at an eligible educational institution. Form 1040x It does not matter whether the expenses were paid in cash, by check, by credit or debit card, or with borrowed funds. Form 1040x For course-related books, supplies, and equipment, only certain expenses qualify. Form 1040x American opportunity credit: Qualified education expenses include amounts spent on books, supplies, and equipment needed for a course of study, whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance. Form 1040x Lifetime learning credit: Qualified education expenses include amounts for books, supplies, and equipment only if required to be paid to the institution as a condition of enrollment or attendance. Form 1040x Qualified education expenses include nonacademic fees, such as student activity fees, athletic fees, or other expenses unrelated to the academic course of instruction, only if the fee must be paid to the institution as a condition of enrollment or attendance. Form 1040x However, fees for personal expenses (described below) are never qualified education expenses. Form 1040x Qualified education expenses for either credit do not include amounts paid for: Personal expenses. Form 1040x This means room and board, insurance, medical expenses (including student health fees), transportation, and other similar personal, living, or family expenses. Form 1040x Any course or other education involving sports, games, or hobbies, or any noncredit course, unless such course or other education is part of the student's degree program or (for the lifetime learning credit only) helps the student acquire or improve job skills. Form 1040x You should receive Form 1098–T, Tuition Statement, from the institution reporting either payments received in 2013 (box 1) or amounts billed in 2013 (box 2). Form 1040x However, the amount in box 1 or 2 of Form 1098–T may be different from the amount you paid (or are treated as having paid). Form 1040x In completing Form 8863, use only the amounts you actually paid (plus any amounts you are treated as having paid) in 2013, reduced as necessary, as described in Adjustments to Qualified Education Expenses , later. Form 1040x Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. Form 1040x Qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. Form 1040x If you or the student takes a deduction for higher education expenses, such as on Schedule A or C (Form 1040), you cannot use those expenses in your qualified education expenses when figuring your education credits. Form 1040x Qualified education expenses for any academic period must be reduced by any tax-free educational assistance allocable to that academic period. Form 1040x See Adjustments to Qualified Education Expenses, later. Form 1040x Prepaid Expenses. Form 1040x   Qualified education expenses paid in 2013 for an academic period that begins in the first 3 months of 2014 can be used in figuring an education credit for 2013 only. Form 1040x See Academic period , earlier. Form 1040x For example, if 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). Form 1040x    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). Form 1040x Paid with borrowed funds. Form 1040x   You can claim an education credit for qualified education expenses paid with the proceeds of a loan. Form 1040x Use the expenses to figure the credit for the year in which the expenses are paid, not the year in which the loan is repaid. Form 1040x Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. Form 1040x Student withdraws from class(es). Form 1040x   You can claim an education credit for qualified education expenses not refunded when a student withdraws. Form 1040x No Double Benefit Allowed You cannot do any of the following. Form 1040x Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim an education credit based on those same expenses. Form 1040x Claim more than one education credit based on the same qualified education expenses. Form 1040x Claim an education credit based on the same expenses used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP). Form 1040x Claim an education credit based on qualified education expenses paid with educational assistance, such as a tax-free scholarship, grant, or employer-provided educational assistance. Form 1040x See Adjustments to Qualified Education Expenses, next. Form 1040x Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid in 2013 by or on behalf of that student under the following rules. Form 1040x The result is the amount of adjusted qualified education expenses for each student. Form 1040x Tax-free educational assistance. Form 1040x   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. Form 1040x See Academic period , earlier. Form 1040x      Tax-free educational assistance includes:    Tax-free parts of scholarships and fellowships (see chapter 12 of this publication and chapter 1 of Pub. Form 1040x 970), The tax-free part of Pell grants (see chapter 1 of Pub. Form 1040x 970), The tax-free part of employer-provided educational assistance (see Pub. Form 1040x 970), Veterans' educational assistance (see chapter 1 of Pub. Form 1040x 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Form 1040x Generally, any scholarship or fellowship is treated as tax-free educational assistance. Form 1040x However, a scholarship or fellowship is not treated as tax-free educational assistance 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: 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 Pub. Form 1040x 970, chapter 1; or 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 Pub. Form 1040x 970, chapter 1. Form 1040x 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 received. Form 1040x For details, see Adjustments of Qualified Education Expenses, in chapters 2 and 3 of Pub. Form 1040x 970. Form 1040x Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. Form 1040x 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). Form 1040x 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. Form 1040x 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. Form 1040x Refunds. Form 1040x   A refund of qualified education expenses may reduce qualified education expenses for the tax year or may require you to repay (recapture) the credit that you claimed in an earlier year. Form 1040x Some tax-free educational assistance received after 2013 may be treated as a refund. Form 1040x See Tax-free educational assistance, earlier. Form 1040x Refunds received in 2013. Form 1040x   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses paid in 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. Form 1040x Refunds received after 2013 but before your income tax return is filed. Form 1040x   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received before you file your 2013 income tax return, reduce the amount of qualified education expenses for 2013 by the amount of the refund. Form 1040x Refunds received after 2013 and after your income tax return is filed. Form 1040x   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received after you file your 2013 income tax return, you may need to repay some or all of the credit that you claimed. Form 1040x See Credit recapture, next. Form 1040x Credit recapture. Form 1040x    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. Form 1040x You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. Form 1040x 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). Form 1040x Include that amount as an additional tax for the year the refund or tax-free assistance was received. Form 1040x Example. Form 1040x    You paid $8,000 tuition and fees in December 2013 for your child's Spring semester beginning in January 2014. Form 1040x You filed your 2013 tax return on February 3, 2014, and claimed a lifetime learning credit of $1,600 ($8,000 qualified education expense paid x . Form 1040x 20). Form 1040x You claimed no other tax credits. Form 1040x After you filed your return, your child withdrew from two courses and you received a refund of $1,400. Form 1040x You must refigure your 2013 lifetime learning credit using $6,600 ($8,000 qualified education expenses − $1,400 refund). Form 1040x The refigured credit is $1,320 and your tax liability increased by $280. Form 1040x You must include the difference of $280 ($1,600 credit originally claimed − $1,320 refigured credit) as additional tax on your 2014 income tax return. Form 1040x See the instructions for your 2014 income tax return to determine where to include this tax. Form 1040x If you also pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. Form 1040x Amounts that do not reduce qualified education expenses. Form 1040x   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. Form 1040x   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. Form 1040x 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 Chapter 1 of Pub. Form 1040x 970. Form 1040x The use of the money is not restricted. Form 1040x   For examples, see chapter 2 in Pub. Form 1040x 970. Form 1040x Figure 35-A. Form 1040x Can You Claim an Education Credit for 2013? This image is too large to be displayed in the current screen. Form 1040x Please click the link to view the image. Form 1040x Figure 35-A. 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