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H&rblock 12. H&rblock   Business Deduction for Work-Related Education Table of Contents What's New Introduction Qualifying Work-Related EducationEducation Required by Employer or by Law Education To Maintain or Improve Skills Education To Meet Minimum Requirements Education That Qualifies You for a New Trade or Business What Expenses Can Be DeductedUnclaimed reimbursement. H&rblock Transportation Expenses Travel Expenses No Double Benefit Allowed How To Treat ReimbursementsAccountable Plans Nonaccountable Plans Deducting Business ExpensesSelf-Employed Persons Employees Performing Artists and Fee-Basis Officials Impairment-Related Work Expenses Recordkeeping Illustrated Example What's New Standard mileage rate. H&rblock  Generally, if you claim a business deduction for work-related education and you drive your car to and from school, the amount you can deduct for miles driven from January 1, 2013 through December 31, 2013, is 56. H&rblock 5 cents per mile. H&rblock For more information, see Transportation Expenses under What Expenses Can Be Deducted, later. H&rblock Introduction This chapter discusses work-related education expenses that you may be able to deduct as business expenses. H&rblock To claim such a deduction, you must: Itemize your deductions on Schedule A (Form 1040 or 1040NR) if you are an employee, File Schedule C (Form 1040), Profit or Loss From Business, Schedule C-EZ (Form 1040), Net Profit From Business, or Schedule F (Form 1040), Profit or Loss From Farming if you are self-employed, and Have expenses for education that meet the requirements discussed under Qualifying Work-Related Education , later. H&rblock What is the tax benefit of taking a business deduction for work-related education. H&rblock   If you are an employee and can itemize your deductions, you may be able to claim a deduction for the expenses you pay for your work-related education. H&rblock Your deduction will be the amount by which your qualifying work-related education expenses plus other job and certain miscellaneous expenses (except for impairment-related work expenses of disabled individuals) is greater than 2% of your adjusted gross income. H&rblock An itemized deduction reduces the amount of your income subject to tax. H&rblock   If you are self-employed, you deduct your expenses for qualifying work-related education directly from your self-employment income. H&rblock This reduces the amount of your income subject to both income tax and self-employment tax. H&rblock   Your work-related education expenses may also qualify you for other tax benefits, such as the American opportunity and lifetime learning credits. H&rblock You may qualify for these other benefits even if you do not meet the requirements listed above. H&rblock   Also, your work-related education expenses may qualify you to claim more than one tax benefit. H&rblock Generally, you may claim any number of benefits as long as you use different expenses to figure each one. H&rblock Qualifying Work-Related Education You can deduct the costs of qualifying work-related education as business expenses. H&rblock This is education that meets at least one of the following two tests. H&rblock The education is required by your employer or the law to keep your present salary, status, or job. H&rblock The required education must serve a bona fide business purpose of your employer. H&rblock The education maintains or improves skills needed in your present work. H&rblock However, even if the education meets one or both of the above tests, it is not qualifying work-related education if it: Is needed to meet the minimum educational requirements of your present trade or business, or Is part of a program of study that will qualify you for a new trade or business. H&rblock You can deduct the costs of qualifying work-related education as a business expense even if the education could lead to a degree. H&rblock Use Figure 12-1, Does Your Work-Related Education Qualify as a quick check to see if your education qualifies. H&rblock Education Required by Employer or by Law Once you have met the minimum educational requirements for your job, your employer or the law may require you to get more education. H&rblock This additional education is qualifying work-related education if all three of the following requirements are met. H&rblock It is required for you to keep your present salary, status, or job, The requirement serves a bona fide business purpose of your employer, and The education is not part of a program that will qualify you for a new trade or business. H&rblock When you get more education than your employer or the law requires, the additional education can be qualifying work-related education only if it maintains or improves skills required in your present work. H&rblock See Education To Maintain or Improve Skills , later. H&rblock Example. H&rblock You are a teacher who has satisfied the minimum requirements for teaching. H&rblock Your employer requires you to take an additional college course each year to keep your teaching job. H&rblock If the courses will not qualify you for a new trade or business, they are qualifying work-related education even if you eventually receive a master's degree and an increase in salary because of this extra education. H&rblock This image is too large to be displayed in the current screen. H&rblock Please click the link to view the image. H&rblock Figure 12-1 Education To Maintain or Improve Skills If your education is not required by your employer or the law, it can be qualifying work-related education only if it maintains or improves skills needed in your present work. H&rblock This could include refresher courses, courses on current developments, and academic or vocational courses. H&rblock Example. H&rblock You repair televisions, radios, and stereo systems for XYZ Store. H&rblock To keep up with the latest changes, you take special courses in radio and stereo service. H&rblock These courses maintain and improve skills required in your work. H&rblock Maintaining skills vs. H&rblock qualifying for new job. H&rblock   Education to maintain or improve skills needed in your present work is not qualifying education if it will also qualify you for a new trade or business. H&rblock Education during temporary absence. H&rblock   If you stop working for a year or less in order to get education to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. H&rblock Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. H&rblock Example. H&rblock You quit your biology research job to become a full-time biology graduate student for 1 year. H&rblock If you return to work in biology research after completing the courses, the education is related to your present work even if you do not go back to work with the same employer. H&rblock Education during indefinite absence. H&rblock   If you stop work for more than a year, your absence from your job is considered indefinite. H&rblock Education during an indefinite absence, even if it maintains or improves skills needed in the work from which you are absent, is considered to qualify you for a new trade or business. H&rblock Therefore, it is not qualifying work-related education. H&rblock Education To Meet Minimum Requirements Education you need to meet the minimum educational requirements for your present trade or business is not qualifying work-related education. H&rblock The minimum educational requirements are determined by: Laws and regulations, Standards of your profession, trade, or business, and Your employer. H&rblock Once you have met the minimum educational requirements that were in effect when you were hired, you do not have to meet any new minimum educational requirements. H&rblock This means that if the minimum requirements change after you were hired, any education you need to meet the new requirements can be qualifying education. H&rblock You have not necessarily met the minimum educational requirements of your trade or business simply because you are already doing the work. H&rblock Example 1. H&rblock You are a full-time engineering student. H&rblock Although you have not received your degree or certification, you work part time as an engineer for a firm that will employ you as a full-time engineer after you finish college. H&rblock Although your college engineering courses improve your skills in your present job, they are also needed to meet the minimum job requirements for a full-time engineer. H&rblock The education is not qualifying work-related education. H&rblock Example 2. H&rblock You are an accountant and you have met the minimum educational requirements of your employer. H&rblock Your employer later changes the minimum educational requirements and requires you to take college courses to keep your job. H&rblock These additional courses can be qualifying work-related education because you have already satisfied the minimum requirements that were in effect when you were hired. H&rblock Requirements for Teachers States or school districts usually set the minimum educational requirements for teachers. H&rblock The requirement is the college degree or the minimum number of college hours usually required of a person hired for that position. H&rblock If there are no requirements, you will have met the minimum educational requirements when you become a faculty member. H&rblock The determination of whether you are a faculty member of an educational institution must be made on the basis of the particular practices of the institution. H&rblock You generally will be considered a faculty member when one or more of the following occurs. H&rblock You have tenure. H&rblock Your years of service count toward obtaining tenure. H&rblock You have a vote in faculty decisions. H&rblock Your school makes contributions for you to a retirement plan other than social security or a similar program. H&rblock Example 1. H&rblock The law in your state requires beginning secondary school teachers to have a bachelor's degree, including 10 professional education courses. H&rblock In addition, to keep the job a teacher must complete a fifth year of training within 10 years from the date of hire. H&rblock If the employing school certifies to the state Department of Education that qualified teachers cannot be found, the school can hire persons with only 3 years of college. H&rblock However, to keep their jobs, these teachers must get a bachelor's degree and the required professional education courses within 3 years. H&rblock Under these facts, the bachelor's degree, whether or not it includes the 10 professional education courses, is considered the minimum educational requirement for qualification as a teacher in your state. H&rblock If you have all the required education except the fifth year, you have met the minimum educational requirements. H&rblock The fifth year of training is qualifying work-related education unless it is part of a program of study that will qualify you for a new trade or business. H&rblock Example 2. H&rblock Assume the same facts as in Example 1 except that you have a bachelor's degree and only six professional education courses. H&rblock The additional four education courses can be qualifying work-related education. H&rblock Although you do not have all the required courses, you have already met the minimum educational requirements. H&rblock Example 3. H&rblock Assume the same facts as in Example 1 except that you are hired with only 3 years of college. H&rblock The courses you take that lead to a bachelor's degree (including those in education) are not qualifying work-related education. H&rblock They are needed to meet the minimum educational requirements for employment as a teacher. H&rblock Example 4. H&rblock You have a bachelor's degree and you work as a temporary instructor at a university. H&rblock At the same time, you take graduate courses toward an advanced degree. H&rblock The rules of the university state that you can become a faculty member only if you get a graduate degree. H&rblock Also, you can keep your job as an instructor only as long as you show satisfactory progress toward getting this degree. H&rblock You have not met the minimum educational requirements to qualify you as a faculty member. H&rblock The graduate courses are not qualifying work-related education. H&rblock Certification in a new state. H&rblock   Once you have met the minimum educational requirements for teachers for your state, you are considered to have met the minimum educational requirements in all states. H&rblock This is true even if you must get additional education to be certified in another state. H&rblock Any additional education you need is qualifying work-related education. H&rblock You have already met the minimum requirements for teaching. H&rblock Teaching in another state is not a new trade or business. H&rblock Example. H&rblock You hold a permanent teaching certificate in State A and are employed as a teacher in that state for several years. H&rblock You move to State B and are promptly hired as a teacher. H&rblock You are required, however, to complete certain prescribed courses to get a permanent teaching certificate in State B. H&rblock These additional courses are qualifying work-related education because the teaching position in State B involves the same general kind of work for which you were qualified in State A. H&rblock Education That Qualifies You for a New Trade or Business Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education. H&rblock This is true even if you do not plan to enter that trade or business. H&rblock If you are an employee, a change of duties that involves the same general kind of work is not a new trade or business. H&rblock Example 1. H&rblock You are an accountant. H&rblock Your employer requires you to get a law degree at your own expense. H&rblock You register at a law school for the regular curriculum that leads to a law degree. H&rblock Even if you do not intend to become a lawyer, the education is not qualifying because the law degree will qualify you for a new trade or business. H&rblock Example 2. H&rblock You are a general practitioner of medicine. H&rblock You take a 2-week course to review developments in several specialized fields of medicine. H&rblock The course does not qualify you for a new profession. H&rblock It is qualifying work- related education because it maintains or improves skills required in your present profession. H&rblock Example 3. H&rblock While working in the private practice of psychiatry, you enter a program to study and train at an accredited psychoanalytic institute. H&rblock The program will lead to qualifying you to practice psychoanalysis. H&rblock The psychoanalytic training does not qualify you for a new profession. H&rblock It is qualifying work-related education because it maintains or improves skills required in your present profession. H&rblock Bar or CPA Review Course Review courses to prepare for the bar examination or the certified public accountant (CPA) examination are not qualifying work-related education. H&rblock They are part of a program of study that can qualify you for a new profession. H&rblock Teaching and Related Duties All teaching and related duties are considered the same general kind of work. H&rblock A change in duties in any of the following ways is not considered a change to a new business. H&rblock Elementary school teacher to secondary school teacher. H&rblock Teacher of one subject, such as biology, to teacher of another subject, such as art. H&rblock Classroom teacher to guidance counselor. H&rblock Classroom teacher to school administrator. H&rblock What Expenses Can Be Deducted If your education meets the requirements described earlier under Qualifying Work-Related Education you can generally deduct your education expenses as business expenses. H&rblock If you are not self-employed, you can deduct business expenses only if you itemize your deductions. H&rblock You cannot deduct expenses related to tax-exempt and excluded income. H&rblock Deductible expenses. H&rblock   The following education expenses can be deducted. H&rblock Tuition, books, supplies, lab fees, and similar items. H&rblock Certain transportation and travel costs. H&rblock Other education expenses, such as costs of research and typing when writing a paper as part of an educational program. H&rblock Nondeductible expenses. H&rblock   You cannot deduct personal or capital expenses. H&rblock For example, you cannot deduct the dollar value of vacation time or annual leave you take to attend classes. H&rblock This amount is a personal expense. H&rblock Unclaimed reimbursement. H&rblock   If you do not claim reimbursement that you are entitled to receive from your employer, you cannot deduct the expenses that apply to that unclaimed reimbursement. H&rblock Example. H&rblock Your employer agrees to pay your education expenses if you file a voucher showing your expenses. H&rblock You do not file a voucher and you do not get reimbursed. H&rblock Because you did not file a voucher, you cannot deduct the expenses on your tax return. H&rblock Transportation Expenses If your education qualifies, you can deduct local transportation costs of going directly from work to school. H&rblock If you are regularly employed and go to school on a temporary basis, you can also deduct the costs of returning from school to home. H&rblock Temporary basis. H&rblock   You go to school on a temporary basis if either of the following situations applies to you. H&rblock Your attendance at school is realistically expected to last 1 year or less and does indeed last for 1 year or less. H&rblock Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. H&rblock Your attendance is temporary up to the date you determine it will last more than 1 year. H&rblock If you are in either situation (1) or (2) above, your attendance is not temporary if facts and circumstances indicate otherwise. H&rblock Attendance not on a temporary basis. H&rblock   You do not go to school on a temporary basis if either of the following situations apply to you. H&rblock Your attendance at school is realistically expected to last more than 1 year. H&rblock It does not matter how long you actually attend. H&rblock Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. H&rblock Your attendance is not temporary after the date you determine it will last more than 1 year. H&rblock Deductible Transportation Expenses If you are regularly employed and go directly from home to school on a temporary basis, you can deduct the round-trip costs of transportation between your home and school. H&rblock This is true regardless of the location of the school, the distance traveled, or whether you attend school on nonwork days. H&rblock Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. H&rblock Transportation expenses do not include amounts spent for travel, meals, or lodging while you are away from home overnight. H&rblock Example 1. H&rblock You regularly work in a nearby town, and go directly from work to home. H&rblock You also attend school every work night for 3 months to take a course that improves your job skills. H&rblock Since you are attending school on a temporary basis, you can deduct your daily round-trip transportation expenses in going between home and school. H&rblock This is true regardless of the distance traveled. H&rblock Example 2. H&rblock Assume the same facts as in Example 1 except that on certain nights you go directly from work to school and then home. H&rblock You can deduct your transportation expenses from your regular work site to school and then home. H&rblock Example 3. H&rblock Assume the same facts as in Example 1 except that you attend the school for 9 months on Saturdays, nonwork days. H&rblock Since you are attending school on a temporary basis, you can deduct your round-trip transportation expenses in going between home and school. H&rblock Example 4. H&rblock Assume the same facts as in Example 1 except that you attend classes twice a week for 15 months. H&rblock Since your attendance in school is not considered temporary, you cannot deduct your transportation expenses in going between home and school. H&rblock If you go directly from work to school, you can deduct the one-way transportation expenses of going from work to school. H&rblock If you go from work to home to school and return home, your transportation expenses cannot be more than if you had gone directly from work to school. H&rblock Using your car. H&rblock    If you use your car (whether you own or lease it) for transportation to school, you can deduct your actual expenses or use the standard mileage rate to figure the amount you can deduct. H&rblock The standard mileage rate for miles driven from January 1, 2013 through December 31, 2013, is 56. H&rblock 5 cents per mile. H&rblock Whichever method you use, you can also deduct parking fees and tolls. H&rblock See Publication 463, chapter 4, for information on deducting your actual expenses of using a car. H&rblock Travel Expenses You can deduct expenses for travel, meals (see 50% limit on meals , later), and lodging if you travel overnight mainly to obtain qualifying work-related education. H&rblock Travel expenses for qualifying work-related education are treated the same as travel expenses for other employee business purposes. H&rblock For more information, see chapter 1 of Publication 463. H&rblock You cannot deduct expenses for personal activities such as sightseeing, visiting, or entertaining. H&rblock Mainly personal travel. H&rblock   If your travel away from home is mainly personal, you cannot deduct all of your expenses for travel, meals, and lodging. H&rblock You can deduct only your expenses for lodging and 50% of your expenses for meals during the time you attend the qualified educational activities. H&rblock   Whether a trip's purpose is mainly personal or educational depends upon the facts and circumstances. H&rblock An important factor is the comparison of time spent on personal activities with time spent on educational activities. H&rblock If you spend more time on personal activities, the trip is considered mainly educational only if you can show a substantial nonpersonal reason for traveling to a particular location. H&rblock Example 1. H&rblock John works in Newark, New Jersey. H&rblock He traveled to Chicago to take a deductible 1-week course at the request of his employer. H&rblock His main reason for going to Chicago was to take the course. H&rblock While there, he took a sightseeing trip, entertained some friends, and took a side trip to Pleasantville for a day. H&rblock Since the trip was mainly for business, John can deduct his round-trip airfare to Chicago. H&rblock He cannot deduct his transportation expenses of going to Pleasantville. H&rblock He can deduct only the meals (subject to the 50% limit) and lodging connected with his educational activities. H&rblock Example 2. H&rblock Sue works in Boston. H&rblock She went to a university in Michigan to take a course for work. H&rblock The course is qualifying work-related education. H&rblock She took one course, which is one-fourth of a full course load of study. H&rblock She spent the rest of the time on personal activities. H&rblock Her reasons for taking the course in Michigan were all personal. H&rblock Sue's trip is mainly personal because three-fourths of her time is considered personal time. H&rblock She cannot deduct the cost of her round-trip train ticket to Michigan. H&rblock She can deduct one-fourth of the meals (subject to the 50% limit) and lodging costs for the time she attended the university. H&rblock Example 3. H&rblock Dave works in Nashville and recently traveled to California to take a 2-week seminar. H&rblock The seminar is qualifying work-related education. H&rblock While there, he spent an extra 8 weeks on personal activities. H&rblock The facts, including the extra 8-week stay, show that his main purpose was to take a vacation. H&rblock Dave cannot deduct his round-trip airfare or his meals and lodging for the 8 weeks. H&rblock He can deduct only his expenses for meals (subject to the 50% limit) and lodging for the 2 weeks he attended the seminar. H&rblock Cruises and conventions. H&rblock   Certain cruises and conventions offer seminars or courses as part of their itinerary. H&rblock Even if the seminars or courses are work related, your deduction for travel may be limited. H&rblock This applies to: Travel by ocean liner, cruise ship, or other form of luxury water transportation, and Conventions outside the North American area. H&rblock   For a discussion of the limits on travel expense deductions that apply to cruises and conventions, see Luxury Water Travel and Conventions in chapter 1 of Publication 463. H&rblock 50% limit on meals. H&rblock   You can deduct only 50% of the cost of your meals while traveling away from home to obtain qualifying work-related education. H&rblock If you were reimbursed for the meals, see How To Treat Reimbursements , later. H&rblock   Employees must use Form 2106 or Form 2106-EZ to apply the 50% limit. H&rblock Travel as Education You cannot deduct the cost of travel as a form of education even if it is directly related to your duties in your work or business. H&rblock Example. H&rblock You are a French language teacher. H&rblock While on sabbatical leave granted for travel, you traveled through France to improve your knowledge of the French language. H&rblock You chose your itinerary and most of your activities to improve your French language skills. H&rblock You cannot deduct your travel expenses as education expenses. H&rblock This is true even if you spent most of your time learning French by visiting French schools and families, attending movies or plays, and engaging in similar activities. H&rblock No Double Benefit Allowed You cannot do either of the following. H&rblock Deduct work-related education expenses as business expenses if you benefit from these expenses under any other provision of the law, for example, as a tuition and fees deduction. H&rblock Deduct work-related education expenses paid with tax-free scholarship, grant, or employer-provided educational assistance. H&rblock See Adjustments to Qualifying Work-Related Education Expenses, next. H&rblock Adjustments to Qualifying Work-Related Education Expenses If you pay qualifying work-related education expenses with certain tax-free funds, you cannot claim a deduction for those amounts. H&rblock You must reduce the qualifying expenses by the amount of such expenses allocable to the tax-free educational assistance. H&rblock Tax-free educational assistance. H&rblock   This includes: The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions). H&rblock Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. H&rblock Amounts that do not reduce qualifying work-related education expenses. H&rblock   Do not reduce the qualifying work-related education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. H&rblock Also, do not reduce the qualifying work-related education expenses by any scholarship or fellowship reported as income on the student's return or any scholarship which, by its terms, cannot be applied to qualifying work-related education expenses. H&rblock How To Treat Reimbursements How you treat reimbursements depends on the arrangement you have with your employer. H&rblock There are two basic types of reimbursement arrangements—accountable plans and nonaccountable plans. H&rblock You can tell the type of plan you are reimbursed under by the way the reimbursement is reported on your Form W-2. H&rblock Note. H&rblock The following rules about reimbursement arrangements also apply to expense allowances received from your employer. H&rblock Accountable Plans To be an accountable plan, your employer's reimbursement arrangement must require you to meet all three of the following rules. H&rblock Your expenses must have a business connection. H&rblock This means your expenses must be deductible under the rules for qualifying work-related education explained earlier. H&rblock You must adequately account to your employer for your expenses within a reasonable period of time. H&rblock You must return any reimbursement or allowance in excess of the expenses accounted for within a reasonable period of time. H&rblock If you are reimbursed under an accountable plan, your employer should not include any reimbursement in your income in box 1 of your Form W-2. H&rblock If your employer included reimbursements in box 1 of your Form W-2 and you meet all three rules for accountable plans, ask your employer for a corrected Form W-2. H&rblock Accountable plan rules not met. H&rblock   Even though you are reimbursed under an accountable plan, some of your expenses may not meet all three rules for accountable plans. H&rblock Those expenses that fail to meet the three rules are treated as having been reimbursed under a Nonaccountable Plan (discussed later). H&rblock Expenses equal reimbursement. H&rblock   Under an accountable plan, if your expenses equal your reimbursement, you do not complete Form 2106 or 2106-EZ. H&rblock Because your expenses and reimbursements are equal, you do not have a deduction. H&rblock Excess expenses. H&rblock   If your expenses are more than your reimbursement, you can deduct your excess expenses. H&rblock This is discussed later, under Deducting Business Expenses . H&rblock Allocating your reimbursements for meals. H&rblock   Because your excess meal expenses are subject to the 50% limit, you must figure them separately from your other expenses. H&rblock If your employer paid you a single amount to cover both meals and other expenses, you must allocate the reimbursement so that you can figure your excess meal expenses separately. H&rblock Make the allocation as follows. H&rblock Divide your meal expenses by your total expenses. H&rblock Multiply your total reimbursement by the result from (1). H&rblock This is the allocated reimbursement for your meal expenses. H&rblock Subtract the amount figured in (2) from your total reimbursement. H&rblock The difference is the allocated reimbursement for your other expenses of qualifying work-related education. H&rblock Example. H&rblock Your employer paid you an expense allowance of $2,000 under an accountable plan. H&rblock The allowance was to cover all of your expenses of traveling away from home to take a 2-week training course for work. H&rblock There was no indication of how much of the reimbursement was for each type of expense. H&rblock Your actual expenses equal $2,500 ($425 for meals + $700 lodging + $150 transportation expenses + $1,225 for books and tuition). H&rblock Using the steps listed above, allocate the reimbursement between the $425 meal expenses and the $2,075 other expenses. H&rblock   1. H&rblock $425 meal expenses  $2,500 total expenses = . H&rblock 17   2. H&rblock $2,000 (reimbursement)×. H&rblock 17     =$340 (allocated reimbursement for meal expenses)   3. H&rblock $2,000 (reimbursement)−$340 (meals)     = $1,660 (allocated reimbursement for other qualifying work-related education expenses) Your excess meal expenses are $85 ($425 − $340) and your excess other expenses are $415 ($2,075 − $1,660). H&rblock After you apply the 50% limit to your meals, you have a deduction for work-related education expenses of $458 (($85 × 50%) + $415). H&rblock Nonaccountable Plans Your employer will combine the amount of any reimbursement or other expense allowance paid to you under a nonaccountable plan with your wages, salary, or other pay and report the total in box 1 of your Form W-2. H&rblock You can deduct your expenses regardless of whether they are more than, less than, or equal to your reimbursement. H&rblock This is discussed later under Deducting Business Expenses . H&rblock An illustrated example of a nonaccountable plan, using Form 2106-EZ, is shown at the end of this chapter. H&rblock Reimbursements for nondeductible expenses. H&rblock   Reimbursements you received for nondeductible expenses are treated as paid under a nonaccountable plan. H&rblock You must include them in your income. H&rblock For example, you must include in your income reimbursements your employer gave you for expenses of education that: You need to meet the minimum educational requirements for your job, or Is part of a program of study that can qualify you for a new trade or business. H&rblock   For more information on accountable and nonaccountable plans, see chapter 6 of Publication 463. H&rblock Deducting Business Expenses Self-employed persons and employees report their business expenses differently. H&rblock The following information explains what forms you must use to deduct the cost of your qualifying work-related education as a business expense. H&rblock Self-Employed Persons If you are self-employed, you must report the cost of your qualifying work-related education on the appropriate form used to report your business income and expenses (generally Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040)). H&rblock If your education expenses include expenses for a car or truck, travel, or meals, report those expenses the same way you report other business expenses for those items. H&rblock See the instructions for the form you file for information on how to complete it. H&rblock Employees If you are an employee, you can deduct the cost of qualifying work-related education only if you: Did not receive (and were not entitled to receive) any reimbursement from your employer, Were reimbursed under a nonaccountable plan (amount is included in box 1 of Form W-2), or Received reimbursement under an accountable plan, but the amount received was less than your expenses for which you claimed reimbursement. H&rblock If either (1) or (2) applies, you can deduct the total qualifying cost. H&rblock If (3) applies, you can deduct only the qualifying costs that were more than your reimbursement. H&rblock In order to deduct the cost of your qualifying work-related education as a business expense, include the amount with your deduction for any other employee business expenses on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. H&rblock (Special rules for expenses of certain performing artists and fee-basis officials and for impairment-related work expenses are explained later. H&rblock ) This deduction (except for impairment-related work expenses of disabled individuals) is subject to the 2%-of-adjusted-gross-income limit that applies to most miscellaneous itemized deductions. H&rblock Form 2106 or 2106-EZ. H&rblock   To figure your deduction for employee business expenses, including qualifying work-related education, you generally must complete Form 2106 or 2106-EZ. H&rblock Form not required. H&rblock   Do not complete either Form 2106 or 2106-EZ if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are not claiming travel, transportation, meal, or entertainment expenses. H&rblock   If you meet both of these requirements, enter the expenses directly on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. H&rblock (Special rules for expenses of certain Performing Artists and Fee-Basis Officials and for Impairment-Related Work Expenses are explained later. H&rblock ) Using Form 2106-EZ. H&rblock   This form is shorter and easier to use than Form 2106. H&rblock Generally, you can use this form if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are using the standard mileage rate if you are claiming vehicle expenses. H&rblock   If you do not meet both of these requirements, use Form 2106. H&rblock Performing Artists and Fee-Basis Officials If you are a qualified performing artist, or a state (or local) government official who is paid in whole or in part on a fee basis, you can deduct the cost of your qualifying work-related education as an adjustment to gross income rather than as an itemized deduction. H&rblock Include the cost of your qualifying work-related education with any other employee business expenses on Form 1040, line 24, or Form 1040NR, line 35. H&rblock You do not have to itemize your deductions on Schedule A (Form 1040 or 1040NR), and, therefore, the deduction is not subject to the 2%-of-adjusted-gross-income limit. H&rblock You must complete Form 2106 or 2106-EZ to figure your deduction even if you meet the requirements described earlier under Form not required . H&rblock For more information on qualified performing artists, see chapter 6 of Publication 463. H&rblock Impairment-Related Work Expenses If you are disabled and have impairment-related work expenses that are necessary for you to be able to get qualifying work-related education, you can deduct these expenses on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14. H&rblock They are not subject to the 2%-of-adjusted-gross-income limit. H&rblock To deduct these expenses, you must complete Form 2106 or 2106-EZ even if you meet the requirements described earlier under Form not required . H&rblock For more information on impairment-related work expenses, see chapter 6 of Publication 463. H&rblock Recordkeeping You must keep records as proof of any deduction claimed on your tax return. H&rblock Generally, you should keep your records for 3 years from the date of filing the tax return and claiming the deduction. H&rblock If you are an employee who is reimbursed for expenses and you give your records and documentation to your employer, you do not have to keep duplicate copies of this information. H&rblock However, you should keep your records for a 3-year period if: You claim deductions for expenses that are more than your reimbursement, Your employer does not use adequate accounting procedures to verify expense accounts, You are related to your employer, or Your expenses are reimbursed under a nonaccountable plan. H&rblock Examples of records to keep. H&rblock   If any of the above cases apply to you, you must be able to prove that your expenses are deductible. H&rblock You should keep adequate records or have sufficient evidence that will support your expenses. H&rblock Estimates or approximations do not qualify as proof of an expense. H&rblock Some examples of what can be used to help prove your expenses are: Documents, such as transcripts, course descriptions, catalogs, etc. H&rblock , showing periods of enrollment in educational institutions, principal subjects studied, and descriptions of educational activity. H&rblock Canceled checks and receipts to verify amounts you spent for: Tuition and books, Meals and lodging while away from home overnight for educational purposes, Travel and transportation, and Other education expenses. H&rblock Statements from your employer explaining whether the education was necessary for you to keep your job, salary, or status; how the education helped maintain or improve skills needed in your job; how much reimbursement you received; and, if you are a teacher, the type of certificate and subjects taught. H&rblock Complete information about any scholarship or fellowship grants, including amounts you received during the year. H&rblock Illustrated Example Victor Jones teaches math at a private high school in North Carolina. H&rblock He was selected to attend a 3-week math seminar at a university in California. H&rblock The seminar will improve his skills in his current job and is qualifying work-related education. H&rblock He was reimbursed for his expenses under his employer's nonaccountable plan, so his reimbursement of $2,100 is included in the wages shown in box 1 of his Form W-2. H&rblock Victor will file Form 1040. H&rblock His actual expenses for the seminar are as follows:   Lodging   $1,050     Meals   526     Airfare   550     Taxi fares   50     Tuition and books   400     Total Expenses   $2,576   Victor files Form 2106-EZ with his tax return. H&rblock He shows his expenses for the seminar in Part I of the form. H&rblock He enters $1,650 ($1,050 + $550 + $50) on line 3 to account for his lodging, airfare, and taxi fares. H&rblock He enters $400 on line 4 for his tuition and books. H&rblock On the line provided for total meals and entertainment expenses, Victor enters $526 for meal expenses. H&rblock He multiplies that amount by 50% and enters the result, $263, on line 5. H&rblock On line 6, Victor totals the amounts from lines 3 through 5. H&rblock He carries the total, $2,313, to Schedule A (Form 1040), line 21. H&rblock Since he does not claim any vehicle expenses, Victor leaves Part II blank. H&rblock His filled-in form is shown on the next page. H&rblock This image is too large to be displayed in the current screen. H&rblock Please click the link to view the image. H&rblock Form 2106-EZ for V. H&rblock Jones Prev  Up  Next   Home   More Online Publications
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PTIN Information and the Freedom of Information Act

The Freedom of Information Act (FOIA), enacted in 1966, gives any person the right to access federal agency records, unless the information is protected from public disclosure by one of nine exemptions. FOIA authorizes government agencies to recover the cost of complying with a FOIA request.

Under FOIA, certain information submitted to the IRS by an individual applying for a preparer tax identification number (PTIN) must be disclosed by the IRS under FOIA, and the individual cannot opt out of the disclosure.

FOIA Awareness for PTIN Holders

The PTIN holder information subject to public disclosure includes:

  • Name
  • Business name
  • Business website address
  • Business phone number
  • Business mailing address – Either a physical address or a P.O. Box is acceptable as a business address.
  • Email address – Any valid email address that you check regularly for PTIN communications is acceptable.
  • Professional credentials

Updating your contact information

To maintain the privacy of your personal information, PTIN holders can update contact information.

Unwanted solicitations

Legitimate IRS emails regarding PTIN issues are sent from two email addresses: irs@service.govdelivery.com and TaxPro_PTIN@irs.gov. The IRS is aware of malicious emails attempting to spoof these email addresses. Pay careful attention to whether an email is actually from one of these addresses. If you feel that you have received a suspicious phishing email, follow the directions found here.

If you receive email solicitations from other organizations and they are unwanted, the Federal Trade Commission, Bureau of Consumer Protection provides guidance on whether an email or other contact violates the CAN-SPAM Act of 2003 and how to report violations.

Additionally, exercise caution on websites without a .gov domain. Only sites with the .gov domain are official government websites.

PTIN application changes

To clearly distinguish between public and private information, the IRS changed the “Permanent Mailing Address” box on the PTIN application to “Personal Mailing Address”. This change clarified that the information is personal and exempt from public disclosure under FOIA rules.

Also, the IRS removed the prohibition on entering a post office box in the “Business Mailing Address” box on the PTIN application. PTIN holders may now enter a P.O. Box as their business mailing address.

If you used your Personal Mailing Address as your Business Mailing Address or used a street address when you preferred to provide a P.O Box as your Business Mailing Address, you may update your contact information. But note that your Business Mailing Address is not exempt from disclosure under FOIA rules and it will be released even if it is the same as your Personal Mailing Address.

Page Last Reviewed or Updated: 11-Sep-2013

The H&rblock

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