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Free tax programs Index Symbols 1099-C, Persons who each receive a Form 1099-C showing the full amount of debt. Free tax programs 501(c)(3) organizations, Section 501(c)(3) organization. Free tax programs A Abandonments, Abandonments Canceled debt, Canceled debt. Free tax programs Assistance (see Tax help) B Bankruptcy, Bankruptcy Reduction of tax attributes, Bankruptcy and Insolvency Business Real property indebtedness, Qualified Real Property Business Indebtedness C Canceled debt, Canceled Debts, Persons who each receive a Form 1099-C showing the full amount of debt. Free tax programs Exceptions Deductible debt, Deductible Debt Gifts, Gifts, Bequests, Devises, and Inheritances Price reduced after purchase, Price Reduced After Purchase Student loans, Student Loans Exclusions Bankruptcy, Bankruptcy Insolvency, Insolvency Qualified farm indebtedness, Qualified Farm Indebtedness Qualified principal residence indebtedness, Qualified Principal Residence Indebtedness Qualified real property business indebtedness, Qualified Real Property Business Indebtedness Co-owners, Persons who each receive a Form 1099-C showing the full amount of debt. Free tax programs D Debts Stockholder's, Stockholder debt Definitions Adjusted tax attributes, Adjusted tax attributes. Free tax programs Main home, Main home. Free tax programs Qualified acquisition indebtedness, Definition of qualified acquisition indebtedness. Free tax programs Qualified farm indebtedness, Qualified Farm Indebtedness Qualified principal residence indebtedness, Qualified Principal Residence Indebtedness Qualified real property business indebtedness, Qualified Real Property Business Indebtedness E Educational loans, Student Loans Exceptions Home Affordable Modification Program, Home Affordable Modification Program F Farm indebtedness, Qualified Farm Indebtedness Reduction of tax attributes, Qualified Farm Indebtedness Foreclosures, Foreclosures and Repossessions Form 1099-A, Forms 1099-A and 1099-C. Free tax programs , Forms 1099-A and 1099-C. Free tax programs 1099-C, Forms 1099-A and 1099-C. Free tax programs , Forms 1099-A and 1099-C. Free tax programs Free tax services, Free help with your tax return. Free tax programs G Gifts, Gifts, Bequests, Devises, and Inheritances H Help (see Tax help) Home Affordable Modification Program, Home Affordable Modification Program I Income from, Canceled Debts Income from canceled debt, Canceled Debts Insolvency, Insolvency Reduction of tax attributes, Bankruptcy and Insolvency L Limits Excluded farm debt, Exclusion limit. Free tax programs Excluded principal residence indebtedness, Exclusion limit. Free tax programs Qualified real property business indebtedness, Exclusion limit. Free tax programs Loans Student, Student Loans M Missing children, photographs of, Reminder Mortgage Debt Relief Act (see Qualified Principal Residence Indebtedness) P Principal residence indebtedness, Qualified Principal Residence Indebtedness Publications (see Tax help) Q Qualified farm indebtedness, Qualified Farm Indebtedness Reduction of tax attributes, Qualified Farm Indebtedness Qualified principal residence indebtedness, Qualified Principal Residence Indebtedness Reduction of tax attributes, Qualified Principal Residence Indebtedness Qualified real property business indebtedness, Qualified Real Property Business Indebtedness Reduction of tax attributes, Qualified Real Property Business Indebtedness R Real property business indebtedness, Qualified Real Property Business Indebtedness Recapture Basis reductions, Recapture of basis reductions. Free tax programs Repossessions, Foreclosures and Repossessions S Stockholder debts, Stockholder debt Student loans, Student Loans Suggestions for publication, Comments and suggestions. Free tax programs T Tax attributes, reduction of Bankruptcy, Bankruptcy and Insolvency Insolvency, Bankruptcy and Insolvency Qualified farm indebtedness, Qualified Farm Indebtedness Qualified principal residence indebtedness, Qualified Principal Residence Indebtedness Qualified real property business indebtedness, Qualified Real Property Business Indebtedness Tax help, How To Get Tax Help TTY/TDD information, How To Get Tax Help Prev  Up     Home   More Online Publications
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Tax Exmept Bonds Questionnaires

Tax Exempt Bonds Compliance Check Questionnaire on Qualified School Construction Bond Issues (April 2012)
The Tax Exempt Bonds office (TEB) of the Tax Exempt and Government Entities division initiated a questionnaire project to evaluate the compliance and record retention policies, procedures, and practices of issuers of qualified school construction bonds (QSCBs).

Tax Exempt Bonds Compliance Check Questionnaire Project Final Report on Governmental and Charitable Financings (July 2011)
The Tax Exempt Bonds office of the Tax Exempt and Government Entities division of the IRS final report on its Tax-Exempt Charitable Financings Compliance Check Questionnaire and Governmental Bond Financings Compliance Check Questionnaire projects.

Tax Exempt Bonds Compliance Check Questionnaire on Direct Pay Bonds (February 2010)
The Tax Exempt Bonds office of the Tax Exempt and Government Entities division of the IRS conducted a compliance check questionnaire to evaluate the issuance and record retention policies, procedures and practices of issuers of direct pay build America bonds.

Tax Exempt Bonds Compliance Check Questionnaire on Advance Refunding Issues (July 2009)
The Tax Exempt Bonds office of the Tax Exempt and Government Entities division conducted a questionnaire project to evaluate the post-issuance compliance and record retention policies, procedures and practices of issuers and conduit borrowers of tax-exempt advance refunding bonds.

Page Last Reviewed or Updated: 26-Mar-2014

The Free Tax Programs

Free tax programs 19. Free tax programs   Education- Related Adjustments Table of Contents Introduction Useful Items - You may want to see: Student Loan Interest DeductionStudent Loan Interest Defined Can You Claim the Deduction How Much Can You Deduct How Do You Figure the Deduction Tuition and Fees DeductionCan You Claim the Deduction What Expenses Qualify Who Is an Eligible Student Who Can Claim a Dependent's Expenses How Much Can You Deduct Educator Expenses Introduction This chapter discusses the education-related adjustment you can deduct in figuring your adjusted gross income. Free tax programs This chapter covers the student loan interest deduction, tuition and fees deduction, and the deduction for educator expenses. Free tax programs Useful Items - You may want to see: Publication 970 Tax Benefits for Education Student Loan Interest Deduction Generally, personal interest you pay, other than certain mortgage interest, is not deductible on your tax return. Free tax programs However, if your modified adjusted gross income (MAGI) is less than $75,000 ($155,000 if filing a joint return) there is a special deduction allowed for paying interest on a student loan (also known as an education loan) used for higher education. Free tax programs For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return before subtracting any deduction for student loan interest. Free tax programs This deduction can reduce the amount of your income subject to tax by up to $2,500 in 2013. Free tax programs Table 19-1 summarizes the features of the student loan interest deduction. Free tax programs Table 19-1. Free tax programs Student Loan Interest Deduction at a Glance Do not rely on this table alone. Free tax programs Refer to the text for more details. Free tax programs Feature Description Maximum benefit You can reduce your income subject to tax by up to $2,500. Free tax programs Loan qualifications Your student loan: •  must have been taken out solely to pay qualified education expenses, and   • cannot be from a related person or made under a qualified employer plan. Free tax programs Student qualifications The student must be: • you, your spouse, or your dependent, and   • enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential at an eligible educational institution. Free tax programs Time limit on deduction You can deduct interest paid during the remaining period of your student loan. Free tax programs Phaseout The amount of your deduction depends on your income level. Free tax programs Student Loan Interest Defined Student loan interest is interest you paid during the year on a qualified student loan. Free tax programs It includes both required and voluntary interest payments. Free tax programs Qualified Student Loan This is a loan you took out solely to pay qualified education expenses (defined later) that were: For you, your spouse, or a person who was your dependent (defined in chapter 3) when you took out the loan, Paid or incurred within a reasonable period of time before or after you took out the loan, and For education provided during an academic period when the student is an eligible student. Free tax programs Loans from the following sources are not qualified student loans. Free tax programs A related person. Free tax programs A qualified employer plan. Free tax programs Exceptions. Free tax programs   For purposes of the student loan interest deduction, the following are exceptions to the general rules for dependents. Free tax programs An individual can be your dependent even if you are the dependent of another taxpayer. Free tax programs An individual can be your dependent even if the individual files a joint return with a spouse. Free tax programs An individual can be your dependent even if the individual had gross income for the year that was equal to or more than the exemption amount for the year ($3,900 for 2013). Free tax programs    Reasonable period of time. Free tax programs   Qualified education expenses are treated as paid or incurred within a reasonable period of time before or after you take out the loan if they are paid with the proceeds of student loans that are part of a federal postsecondary education loan program. Free tax programs   Even if not paid with the proceeds of that type of loan, the expenses are treated as paid or incurred within a reasonable period of time if both of the following requirements are met. Free tax programs The expenses relate to a specific academic period. Free tax programs The loan proceeds are disbursed within a period that begins 90 days before the start of that academic period and ends 90 days after the end of that academic period. Free tax programs   If neither of the above situations applies, the reasonable period of time is determined based on all the relevant facts and circumstances. Free tax programs Academic period. Free tax programs   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. Free tax programs 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. Free tax programs Eligible student. Free tax programs   This is a student who was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. Free tax programs Enrolled at least half-time. Free tax programs   A student was enrolled at least half-time if the student was taking at least half the normal full-time work load for his or her course of study. Free tax programs   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. Free tax programs However, the standard may not be lower than any of those established by the U. Free tax programs S. Free tax programs Department of Education under the Higher Education Act of 1965. Free tax programs Related person. Free tax programs   You cannot deduct interest on a loan you get from a related person. Free tax programs Related persons include: Your spouse, Your brothers and sisters, Your half brothers and half sisters, Your ancestors (parents, grandparents, etc. Free tax programs ), Your lineal descendants (children, grandchildren, etc. Free tax programs ), and Certain corporations, partnerships, trusts, and exempt organizations. Free tax programs Qualified employer plan. Free tax programs   You cannot deduct interest on a loan made under a qualified employer plan or under a contract purchased under such a plan. Free tax programs Qualified Education Expenses For purposes of the student loan interest deduction, these expenses are the total costs of attending an eligible educational institution, including graduate school. Free tax programs They include amounts paid for the following items. Free tax programs Tuition and fees. Free tax programs Room and board. Free tax programs Books, supplies, and equipment. Free tax programs Other necessary expenses (such as transportation). Free tax programs The cost of room and board qualifies only to the extent that it is not more than: The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student, or If greater, the actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. Free tax programs Eligible educational institution. Free tax programs   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. Free tax programs S. Free tax programs Department of Education. Free tax programs It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Free tax programs   Certain educational institutions located outside the United States also participate in the U. Free tax programs S. Free tax programs Department of Education's Federal Student Aid (FSA) programs. Free tax programs   For purposes of the student loan interest deduction, an eligible educational institution also includes an institution conducting an internship or residency program leading to a degree or certificate from an institution of higher education, a hospital, or a health care facility that offers postgraduate training. Free tax programs   An educational institution must meet the above criteria only during the academic period(s) for which the student loan was incurred. Free tax programs The deductibility of interest on the loan is not affected by the institution's subsequent loss of eligibility. Free tax programs    The educational institution should be able to tell you if it is an eligible educational institution. Free tax programs Adjustments to qualified education expenses. Free tax programs   You must reduce your qualified education expenses by certain tax-free items (such as the tax-free part of scholarships and fellowships). Free tax programs See chapter 4 of Publication 970 for details. Free tax programs Include as Interest In addition to simple interest on the loan, certain loan origination fees, capitalized interest, interest on revolving lines of credit, and interest on refinanced student loans can be student loan interest if all other requirements are met. Free tax programs Loan origination fee. Free tax programs   In general, this is a one-time fee charged by the lender when a loan is made. Free tax programs To be deductible as interest, the fee must be for the use of money rather than for property or services (such as commitment fees or processing costs) provided by the lender. Free tax programs A loan origination fee treated as interest accrues over the life of the loan. Free tax programs Capitalized interest. Free tax programs    This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. Free tax programs Interest on revolving lines of credit. Free tax programs   This interest, which includes interest on credit card debt, is student loan interest if the borrower uses the line of credit (credit card) only to pay qualified education expenses. Free tax programs See Qualified Education Expenses , earlier. Free tax programs Interest on refinanced student loans. Free tax programs   This includes interest on both: Consolidated loans—loans used to refinance more than one student loan of the same borrower, and Collapsed loans—two or more loans of the same borrower that are treated by both the lender and the borrower as one loan. Free tax programs If you refinance a qualified student loan for more than your original loan and you use the additional amount for any purpose other than qualified education expenses, you cannot deduct any interest paid on the refinanced loan. Free tax programs Voluntary interest payments. Free tax programs   These are payments made on a qualified student loan during a period when interest payments are not required, such as when the borrower has been granted a deferment or the loan has not yet entered repayment status. Free tax programs Do Not Include as Interest You cannot claim a student loan interest deduction for any of the following items. Free tax programs Interest you paid on a loan if, under the terms of the loan, you are not legally obligated to make interest payments. Free tax programs Loan origination fees that are payments for property or services provided by the lender, such as commitment fees or processing costs. Free tax programs Interest you paid on a loan to the extent payments were made through your participation in the National Health Service Corps Loan Repayment Program (the “NHSC Loan Repayment Program”) or certain other loan repayment assistance programs. Free tax programs For more information, see Student Loan Repayment Assistance in chapter 5 of Publication 970. Free tax programs Can You Claim the Deduction Generally, you can claim the deduction if all of the following requirements are met. Free tax programs Your filing status is any filing status except married filing separately. Free tax programs No one else is claiming an exemption for you on his or her tax return. Free tax programs You are legally obligated to pay interest on a qualified student loan. Free tax programs You paid interest on a qualified student loan. Free tax programs Interest paid by others. Free tax programs   If you are the person legally obligated to make interest payments and someone else makes a payment of interest on your behalf, you are treated as receiving the payments from the other person and, in turn, paying the interest. Free tax programs See chapter 4 of Publication 970 for more information. Free tax programs No Double Benefit Allowed You cannot deduct as interest on a student loan any amount that is an allowable deduction under any other provision of the tax law (for example, home mortgage interest). Free tax programs How Much Can You Deduct Your student loan interest deduction for 2013 is generally the smaller of: $2,500, or The interest you paid in 2013. Free tax programs However, the amount determined above is phased out (gradually reduced) if your MAGI is between $60,000 and $75,000 ($125,000 and $155,000 if you file a joint return). Free tax programs You cannot take a student loan interest deduction if your MAGI is $75,000 or more ($155,000 or more if you file a joint return). Free tax programs For details on figuring your MAGI, see chapter 4 of Publication 970. Free tax programs How Do You Figure the Deduction Generally, you figure the deduction using the Student Loan Interest Deduction Worksheet in the Form 1040 or Form 1040A instructions. Free tax programs However, if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico, you must complete Worksheet 4-1 in chapter 4 of Publication 970. Free tax programs To help you figure your student loan interest deduction, you should receive Form 1098-E, Student Loan Interest Statement. Free tax programs Generally, an institution (such as a bank or governmental agency) that received interest payments of $600 or more during 2013 on one or more qualified student loans must send Form 1098-E (or acceptable substitute) to each borrower by January 31, 2014. Free tax programs For qualified student loans taken out before September 1, 2004, the institution is required to include on Form 1098-E only payments of stated interest. Free tax programs Other interest payments, such as certain loan origination fees and capitalized interest, may not appear on the form you receive. Free tax programs However, if you pay qualifying interest that is not included on Form 1098-E, you can also deduct those amounts. Free tax programs For information on allocating payments between interest and principal, see chapter 4 of Publication 970. Free tax programs To claim the deduction, enter the allowable amount on Form 1040, line 33, or Form 1040A, line 18. Free tax programs Tuition and Fees Deduction You may be able to deduct qualified education expenses paid during the year for yourself, your spouse, or your dependent(s). Free tax programs You cannot claim this deduction if your filing status is married filing separately or if another person can claim an exemption for you as a dependent on his or her tax return. Free tax programs The qualified expenses must be for higher education, as explained later under What Expenses Qualify . Free tax programs The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. Free tax programs Table 19-2 summarizes the features of the tuition and fees deduction. Free tax programs You may be able to take a credit for your education expenses instead of a deduction. Free tax programs You can choose the one that will give you the lower tax. Free tax programs See chapter 35, Education Credits, for details about the credits. Free tax programs Can You Claim the Deduction The following rules will help you determine if you can claim the tuition and fees deduction. Free tax programs Who Can Claim the Deduction Generally, you can claim the tuition and fees deduction if all three of the following requirements are met. Free tax programs You paid qualified education expenses of higher education in 2013 for academic periods beginning in 2013 and those beginning in the first three months of 2014. Free tax programs You paid the education expenses for an eligible student. Free tax programs The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption (defined in chapter 3) on your tax return. Free tax programs Qualified education expenses are defined under What Expenses Qualify . Free tax programs Eligible students are defined later under Who Is an Eligible Student . Free tax programs Who Cannot Claim the Deduction You cannot claim the tuition and fees deduction if any of the following apply. Free tax programs Your filing status is married filing separately. Free tax programs Another person can claim an exemption for you as a dependent on his or her tax return. Free tax programs You cannot take the deduction even if the other person does not actually claim that exemption. Free tax programs Your modified adjusted gross income (MAGI) is more than $80,000 ($160,000 if filing a joint return). Free tax programs You (or your spouse) were a nonresident alien for any part of 2013 and the nonresident alien did not elect to be treated as a resident alien for tax purposes. Free tax programs More information on nonresident aliens can be found in Publication 519, U. Free tax programs S. Free tax programs Tax Guide for Aliens. Free tax programs You or anyone else claims an American opportunity or lifetime learning credit in 2013 with respect to expenses of the student for whom the qualified education expenses were paid. Free tax programs However, a state tax credit will not disqualify you from claiming a tuition and fees deduction. Free tax programs Table 19-2. Free tax programs Tuition and Fees Deduction at a Glance Do not rely on this table alone. Free tax programs Refer to the text for more details. Free tax programs Question   Answer What is the maximum benefit?   You can reduce your income subject to tax by up to $4,000. Free tax programs Where is the deduction taken?   As an adjustment to income on Form 1040, line 34, or Form 1040A, line 19. Free tax programs For whom must the expenses be paid?   A student enrolled in an eligible educational institution who is either: you, your spouse, or your dependent for whom you claim an exemption. Free tax programs What tuition and fees are deductible?   Tuition and fees required for enrollment or attendance at an eligible postsecondary educational institution, but not including personal, living, or family expenses, such as room and board. Free tax programs What Expenses Qualify The tuition and fees deduction is based on qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. Free tax programs Generally, the deduction is allowed for qualified education expenses paid in 2013 in connection with enrollment at an institution of higher education during 2013 or for an academic period (defined earlier under Student Loan Interest Deduction ) beginning in 2013 or in the first 3 months of 2014. Free tax programs Payments with borrowed funds. Free tax programs   You can claim a tuition and fees deduction for qualified education expenses paid with the proceeds of a loan. Free tax programs Use the expenses to figure the deduction for the year in which the expenses are paid, not the year in which the loan is repaid. Free tax programs Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. Free tax programs Student withdraws from class(es). Free tax programs   You can claim a tuition and fees deduction for qualified education expenses not refunded when a student withdraws. Free tax programs Qualified Education Expenses For purposes of the tuition and fees deduction, qualified education expenses are tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. Free tax programs Eligible educational institution. Free tax programs   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. Free tax programs S. Free tax programs Department of Education. Free tax programs It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Free tax programs The educational institution should be able to tell you if it is an eligible educational institution. Free tax programs   Certain educational institutions located outside the United States also participate in the U. Free tax programs S. Free tax programs Department of Education's Federal Student Aid (FSA) programs. Free tax programs Academic period. Free tax programs    An academic period is any quarter, semester, trimester, or any other period of study as reasonably determined by an eligible educational institution. Free tax programs If an eligible educational institution uses credit hours and does not have academic terms, each payment period may be treated as an academic period. Free tax programs Related expenses. Free tax programs   Student-activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses for the tuition and fees deduction only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance. Free tax programs Prepaid expenses. Free tax programs   Qualified education expenses paid in 2013 for an academic period that begins in the first three months of 2014 can be used in figuring the tuition and fees deduction. Free tax programs See Academic period, earlier. Free tax programs 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 the tuition and fees deduction for 2013 only if you meet all the other requirements. Free tax programs    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 tuition and fees deduction. Free tax programs No Double Benefit Allowed You cannot do any of the following. Free tax programs Deduct qualified education expenses you deduct under any other provision of the law, for example, as a business expense. Free tax programs Deduct qualified education expenses for a student on your income tax return if you or anyone else claims an American opportunity or lifetime learning credit for that same student in the same year. Free tax programs Deduct qualified education expenses that have been used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or a qualified tuition program (QTP). Free tax programs For a QTP, this applies only to the amount of tax-free earnings that were distributed, not to the recovery of contributions to the program. Free tax programs See Figuring the Taxable Portion of a Distribution in chapter 7 (Coverdell ESA) and chapter 8 (QTP) of Publication 970. Free tax programs Deduct qualified education expenses that have been paid with tax-free interest on U. Free tax programs S. Free tax programs savings bonds (Form 8815). Free tax programs See Figuring the Tax-Free Amount in chapter 10 of Publication 970. Free tax programs Deduct qualified education expenses that have been paid with tax-free educational assistance such as a scholarship, grant, or employer-provided educational assistance. Free tax programs See Adjustments to qualified education expenses, later. Free tax programs Adjustments to qualified education expenses. Free tax programs   For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. Free tax programs The result is the amount of adjusted qualified education expenses for each student. Free tax programs Tax-free educational assistance. Free tax programs   For tax-free educational assistance you received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance to that academic period. Free tax programs See Academic period, earlier. Free tax programs   This includes: The tax-free part of scholarships and fellowships, including Pell grants (see chapter 1 of Publication 970), The tax-free part of any employer-provided educational assistance (see chapter 11 of Publication 970), Veterans' educational assistance (see chapter 1 of Publication 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Free tax programs Generally, any scholarship or fellowship you receive is treated as tax-free educational assistance. Free tax programs However, a scholarship or fellowship is not treated as tax-free educational assistance to the extent you include it in gross income (if you are 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. Free tax programs 970, chapter 1. Free tax programs 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. Free tax programs 970, chapter 1. Free tax programs You may be able to increase the combined value of your tuition and fees deduction and certain educational assistance if you include some or all of the educational assistance in income in the year it is received. Free tax programs For details, see Adjustments to Qualified Education Expenses in chapter 6 of Pub. Free tax programs 970. Free tax programs Some tax-free educational assistance received in 2013 may be treated as a refund of qualified education expenses paid in 2013. Free tax programs 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). Free tax programs 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. Free tax programs 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. Free tax programs Refunds. Free tax programs   A refund of qualified education expenses may reduce adjusted qualified education expenses for the tax year or may require you to include some or all of the refund in your gross income for the year the refund is received. Free tax programs See chapter 6 of Pub. Free tax programs 970 for more information. Free tax programs Some tax-free educational assistance received after 2013 may be treated as a refund. Free tax programs See Tax-free educational assistance, earlier. Free tax programs Refunds received in 2013. Free tax programs    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. Free tax programs Refunds received after 2013 but before your income tax return is filed. Free tax programs   If you receive a refund after 2013 of qualified education expenses you paid 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. Free tax programs Refunds received after 2013 and after your income tax return is filed. Free tax programs   If you receive a refund after 2013 of qualified education expenses you paid in 2013 and the refund is received after you file your 2013 income tax return, you may need to include some or all of the refund in your gross income for the year the refund is received. Free tax programs See chapter 6 of Pub. Free tax programs 970 for more information. Free tax programs Coordination with Coverdell education savings accounts and qualified tuition programs. Free tax programs    Reduce your qualified education expenses by any qualified education expenses used to figure the exclusion from gross income of (a) interest received under an education savings bond program, or (b) any distribution from a Coverdell education savings account or qualified tuition program (QTP). Free tax programs For a QTP, this applies only to the amount of tax-free earnings that were distributed, not to the recovery of contributions to the program. Free tax programs Amounts that do not reduce qualified education expenses. Free tax programs   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. Free tax programs   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. Free tax programs 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. Free tax programs The use of the money is not restricted. Free tax programs Expenses That Do Not Qualify Qualified education expenses do not include amounts paid for: Insurance, Medical expenses (including student health fees), Room and board, Transportation, or Similar personal, living, or family expenses. Free tax programs This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. Free tax programs Sports, games, hobbies, and noncredit courses. Free tax programs   Qualified education expenses generally do not include expenses that relate to any course of instruction or other education that involves sports, games or hobbies, or any noncredit course. Free tax programs However, if the course of instruction or other education is part of the student's degree program, these expenses can qualify. Free tax programs Comprehensive or bundled fees. Free tax programs   Some eligible educational institutions combine all of their fees for an academic period into one amount. Free tax programs If you do not receive, or do not have access to, an allocation showing how much you paid for qualified education expenses and how much you paid for personal expenses, such as those listed above, contact the institution. Free tax programs The institution is required to make this allocation and provide you with the amount you paid (or were billed) for qualified education expenses on Form 1098-T, Tuition Statement. Free tax programs See How Do You Figure the Deduction , later, for more information about Form 1098-T. Free tax programs Who Is an Eligible Student For purposes of the tuition and fees deduction, an eligible student is a student who is enrolled in one or more courses at an eligible educational institution (defined earlier). Free tax programs Who Can Claim a Dependent's Expenses Generally, in order to claim the tuition and fees deduction for qualified education expenses for a dependent, you must: Have paid the expenses, and Claim an exemption for the student as a dependent. Free tax programs Table 19-3 summarizes who can claim the deduction. Free tax programs How Much Can You Deduct The maximum tuition and fees deduction in 2013 is $4,000, $2,000, or $0, depending on the amount of your MAGI. Free tax programs For details on figuring your MAGI, see chapter 6 of Publication 970. Free tax programs How Do You Figure the Deduction Figure the deduction using Form 8917. Free tax programs To help you figure your tuition and fees deduction, you should receive Form 1098-T, Tuition Statement. Free tax programs Generally, an eligible educational institution (such as a college or university) must send Form 1098-T (or acceptable substitute) to each enrolled student by January 31, 2014. Free tax programs To claim the deduction, enter the allowable amount on Form 1040, line 34, or Form 1040A, line 19, and attach your completed Form 8917. Free tax programs Table 19-3. Free tax programs Who Can Claim a Dependent's Expenses Do not rely on this table alone. Free tax programs See Who Can Claim a Dependent's Expenses in chapter 6 of Publication 970. Free tax programs IF your dependent is an eligible student and you. Free tax programs . Free tax programs . Free tax programs AND. Free tax programs . Free tax programs . Free tax programs THEN. Free tax programs . Free tax programs . Free tax programs claim an exemption for your dependent you paid all qualified education expenses for your dependent only you can deduct the qualified education expenses that you paid. Free tax programs Your dependent cannot take a deduction. Free tax programs claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. Free tax programs do not claim an exemption for your dependent you paid all qualified education expenses no one is allowed to take a deduction. Free tax programs do not claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. Free tax programs Educator Expenses If you were an eligible educator in 2013, you can deduct on Form 1040, line 23, or Form 1040A, line 16, up to $250 of qualified expenses you paid in 2013. Free tax programs If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. Free tax programs However, neither spouse can deduct more than $250 of his or her qualified expenses on Form 1040, line 23, or Form 1040A, line 16. Free tax programs You may be able to deduct expenses that are more than the $250 (or $500) limit on Schedule A (Form 1040), line 21. Free tax programs Eligible educator. Free tax programs   An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide who worked in a school for at least 900 hours during a school year. Free tax programs Qualified expenses. Free tax programs   Qualified expenses include ordinary and necessary expenses paid in connection with books, supplies, equipment (including computer equipment, software, and services), and other materials used in the classroom. Free tax programs An ordinary expense is one that is common and accepted in your educational field. Free tax programs A necessary expense is one that is helpful and appropriate for your profession as an educator. Free tax programs An expense does not have to be required to be considered necessary. Free tax programs   Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. Free tax programs   You must reduce your qualified expenses by the following amounts. Free tax programs Excludable U. Free tax programs S. Free tax programs series EE and I savings bond interest from Form 8815. Free tax programs See Figuring the Tax-Free Amount in chapter 10 of Publication 970. Free tax programs Nontaxable qualified tuition program earnings or distributions. Free tax programs See Figuring the Taxable Portion of a Distribution in chapter 8 of Publication 970. Free tax programs Nontaxable distribution of earnings from a Coverdell education savings account. Free tax programs See Figuring the Taxable Portion of a Distribution in chapter 7 of Publication 970. Free tax programs Any reimbursements you received for these expenses that were not reported to you in box 1 of your Form W-2. 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