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Tax Correction Form

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Tax Correction Form

Tax correction form 4. Tax correction form   Student Loan Interest Deduction Table of Contents Introduction Student Loan Interest DefinedQualified Student Loan Qualified Education Expenses Include As Interest Do Not Include As Interest When Must Interest Be Paid Can You Claim the DeductionNo Double Benefit Allowed Figuring the DeductionEffect of the Amount of Your Income on the Amount of Your Deduction Which Worksheet To Use Claiming the Deduction Introduction Generally, personal interest you pay, other than certain mortgage interest, is not deductible on your tax return. Tax correction form 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. Tax correction form 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. Tax correction form This deduction can reduce the amount of your income subject to tax by up to $2,500 in 2013. Tax correction form The student loan interest deduction is taken as an adjustment to income. Tax correction form This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). Tax correction form This chapter explains: What type of loan interest you can deduct, Whether you can claim the deduction, What expenses you must have paid with the student loan, Who is an eligible student, How to figure the deduction, and How to claim the deduction. Tax correction form Table 4-1. Tax correction form Student Loan Interest Deduction at a Glance This table summarizes the features of the student loan interest deduction. Tax correction form Do not rely on this table alone. Tax correction form Refer to the text for complete details. Tax correction form Feature   Description Maximum benefit   You can reduce your income subject to tax by up to $2,500. Tax correction form 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. Tax correction form Student qualifications   The student must be: •you, your spouse, or your dependent, and  •enrolled at least half-time in a degree program. Tax correction form Time limit on deduction   You can deduct interest paid during the remaining period of your student loan. Tax correction form Limit on modified adjusted gross income (MAGI)   $155,000 if married filing a joint return; $75,000 if single, head of household, or qualifying widow(er). Tax correction form Student Loan Interest Defined Student loan interest is interest you paid during the year on a qualified student loan. Tax correction form It includes both required and voluntary interest payments. Tax correction form 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 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 for an eligible student. Tax correction form Loans from the following sources are not qualified student loans. Tax correction form A related person. Tax correction form A qualified employer plan. Tax correction form Your dependent. Tax correction form   Generally, your dependent is someone who is either a: Qualifying child, or Qualifying relative. Tax correction form You can find more information about dependents in Publication 501. Tax correction form Exceptions. Tax correction form   For purposes of the student loan interest deduction, there are the following exceptions to the general rules for dependents. Tax correction form An individual can be your dependent even if you are the dependent of another taxpayer. Tax correction form An individual can be your dependent even if the individual files a joint return with a spouse. Tax correction form 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). Tax correction form Reasonable period of time. Tax correction form   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. Tax correction form   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. Tax correction form The expenses relate to a specific academic period, and 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. Tax correction form   If neither of the above situations applies, the reasonable period of time usually is determined based on all the relevant facts and circumstances. Tax correction form Academic period. Tax correction form   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. Tax correction form 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. Tax correction form Eligible student. Tax correction form   This is a student who was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. Tax correction form Enrolled at least half-time. Tax correction form   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. Tax correction form   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. Tax correction form However, the standard may not be lower than any of those established by the U. Tax correction form S. Tax correction form Department of Education under the Higher Education Act of 1965. Tax correction form Related person. Tax correction form   You cannot deduct interest on a loan you get from a related person. Tax correction form Related persons include: Your spouse, Your brothers and sisters, Your half brothers and half sisters, Your ancestors (parents, grandparents, etc. Tax correction form ), Your lineal descendants (children, grandchildren, etc. Tax correction form ), and Certain corporations, partnerships, trusts, and exempt organizations. Tax correction form Qualified employer plan. Tax correction form   You cannot deduct interest on a loan made under a qualified employer plan or under a contract purchased under such a plan. Tax correction form 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. Tax correction form They include amounts paid for the following items. Tax correction form Tuition and fees. Tax correction form Room and board. Tax correction form Books, supplies, and equipment. Tax correction form Other necessary expenses (such as transportation). Tax correction form The cost of room and board qualifies only to the extent that it is not more than the greater of: 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 The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. Tax correction form Eligible educational institution. Tax correction form   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. Tax correction form S. Tax correction form Department of Education. Tax correction form It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Tax correction form   Certain educational institutions located outside the United States also participate in the U. Tax correction form S. Tax correction form Department of Education's Federal Student Aid (FSA) programs. Tax correction form   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. Tax correction form   An educational institution must meet the above criteria only during the academic period(s) for which the student loan was incurred. Tax correction form The deductibility of interest on the loan is not affected by the institution's subsequent loss of eligibility. Tax correction form    The educational institution should be able to tell you if it is an eligible educational institution. Tax correction form Adjustments to Qualified Education Expenses You must reduce your qualified education expenses by the total amount paid for them with the following tax-free items. Tax correction form Employer-provided educational assistance. Tax correction form See chapter 11, Employer-Provided Educational Assistance . Tax correction form Tax-free distribution of earnings from a Coverdell education savings account (ESA). Tax correction form See Tax-Free Distributions in chapter 7, Coverdell Education Savings Account. Tax correction form Tax-free distribution of earnings from a qualified tuition program (QTP). Tax correction form See Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program. Tax correction form U. Tax correction form S. Tax correction form savings bond interest that you exclude from income because it is used to pay qualified education expenses. Tax correction form See chapter 10, Education Savings Bond Program . Tax correction form The tax-free part of scholarships and fellowships. Tax correction form See Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Tax correction form Veterans' educational assistance. Tax correction form See Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Tax correction form Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Tax correction form Include As Interest In addition to simple interest on the loan, if all other requirements are met, the items discussed below can be student loan interest. Tax correction form Loan origination fee. Tax correction form   In general, this is a one-time fee charged by the lender when a loan is made. Tax correction form To be deductible as interest, a loan origination 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. Tax correction form A loan origination fee treated as interest accrues over the term of the loan. Tax correction form   Loan origination fees were not required to be reported on Form 1098-E, Student Loan Interest Statement, for loans made before September 1, 2004. Tax correction form If loan origination fees are not included in the amount reported on your Form 1098-E, you can use any reasonable method to allocate the loan origination fees over the term of the loan. Tax correction form The method shown in the example below allocates equal portions of the loan origination fee to each payment required under the terms of the loan. Tax correction form A method that results in the double deduction of the same portion of a loan origination fee would not be reasonable. Tax correction form Example. Tax correction form In August 2004, Bill took out a student loan for $16,000 to pay the tuition for his senior year of college. Tax correction form The lender charged a 3% loan origination fee ($480) that was withheld from the funds Bill received. Tax correction form Bill began making payments on his student loan in 2013. Tax correction form Because the loan origination fee was not included in his 2013 Form 1098-E, Bill can use any reasonable method to allocate that fee over the term of the loan. Tax correction form Bill's loan is payable in 120 equal monthly payments. Tax correction form He allocates the $480 fee equally over the total number of payments ($480 ÷ 120 months = $4 per month). Tax correction form Bill made 7 payments in 2013, so he paid $28 ($4 × 7) of interest attributable to the loan origination fee. Tax correction form To determine his student loan interest deduction, he will add the $28 to the amount of other interest reported to him on Form 1098-E. Tax correction form Capitalized interest. Tax correction form   This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. Tax correction form Capitalized interest is treated as interest for tax purposes and is deductible as payments of principal are made on the loan. Tax correction form No deduction for capitalized interest is allowed in a year in which no loan payments were made. Tax correction form Interest on revolving lines of credit. Tax correction form   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. Tax correction form See Qualified Education Expenses , earlier. Tax correction form Interest on refinanced student loans. Tax correction form   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. Tax correction form    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. Tax correction form Voluntary interest payments. Tax correction form   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. Tax correction form Example. Tax correction form The payments on Roger's student loan were scheduled to begin in June 2012, 6 months after he graduated from college. Tax correction form He began making payments as required. Tax correction form In September 2013, Roger enrolled in graduate school on a full-time basis. Tax correction form He applied for and was granted deferment of his loan payments while in graduate school. Tax correction form Wanting to pay down his student loan as much as possible, he made loan payments in October and November 2013. Tax correction form Even though these were voluntary (not required) payments, Roger can deduct the interest paid in October and November. Tax correction form Allocating Payments Between Interest and Principal The allocation of payments between interest and principal for tax purposes might not be the same as the allocation shown on the Form 1098-E or other statement you receive from the lender or loan servicer. Tax correction form To make the allocation for tax purposes, a payment generally applies first to stated interest that remains unpaid as of the date the payment is due, second to any loan origination fees allocable to the payment, third to any capitalized interest that remains unpaid as of the date the payment is due, and fourth to the outstanding principal. Tax correction form Example. Tax correction form In August 2012, Peg took out a $10,000 student loan to pay the tuition for her senior year of college. Tax correction form The lender charged a 3% loan origination fee ($300) that was withheld from the funds Peg received. Tax correction form The interest (5% simple) on this loan accrued while she completed her senior year and for 6 months after she graduated. Tax correction form At the end of that period, the lender determined the amount to be repaid by capitalizing all accrued but unpaid interest ($625 interest accrued from August 2012 through October 2013) and adding it to the outstanding principal balance of the loan. Tax correction form The loan is payable over 60 months, with a payment of $200. Tax correction form 51 due on the first of each month, beginning November 2013. Tax correction form Peg did not receive a Form 1098-E for 2013 from her lender because the amount of interest she paid did not require the lender to issue an information return. Tax correction form However, she did receive an account statement from the lender that showed the following 2013 payments on her outstanding loan of $10,625 ($10,000 principal + $625 accrued but unpaid interest). Tax correction form Payment Date   Payment   Stated Interest   Principal November 2013   $200. Tax correction form 51   $44. Tax correction form 27   $156. Tax correction form 24 December 2013   $200. Tax correction form 51   $43. Tax correction form 62   $156. Tax correction form 89 Totals   $401. Tax correction form 02   $87. Tax correction form 89   $313. Tax correction form 13 To determine the amount of interest that could be deducted on the loan for 2013, Peg starts with the total amount of stated interest she paid, $87. Tax correction form 89. Tax correction form Next, she allocates the loan origination fee over the term of the loan ($300 ÷ 60 months = $5 per month). Tax correction form A total of $10 ($5 of each of the two principal payments) should be treated as interest for tax purposes. Tax correction form Peg then applies the unpaid capitalized interest ($625) to the two principal payments in the order in which they were made, and determines that the remaining amount of principal of both payments is treated as interest for tax purposes. Tax correction form Assuming that Peg qualifies to take the student loan interest deduction, she can deduct $401. Tax correction form 02 ($87. Tax correction form 89 + $10 + $303. Tax correction form 13). Tax correction form For 2014, Peg will continue to allocate $5 of the loan origination fee to the principal portion of each monthly payment she makes and treat that amount as interest for tax purposes. Tax correction form She also will apply the remaining amount of capitalized interest ($625 − $303. Tax correction form 13 = $321. Tax correction form 87) to the principal payments in the order in which they are made until the balance is zero, and treat those amounts as interest for tax purposes. Tax correction form Do Not Include As Interest You cannot claim a student loan interest deduction for any of the following items. Tax correction form Interest you paid on a loan if, under the terms of the loan, you are not legally obligated to make interest payments. Tax correction form Loan origination fees that are payments for property or services provided by the lender, such as commitment fees or processing costs. Tax correction form 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. Tax correction form For more information, see Student Loan Repayment Assistance in chapter 5, Student Loan Cancellations and Repayment Assistance. Tax correction form When Must Interest Be Paid You can deduct all interest you paid during the year on your student loan, including voluntary payments, until the loan is paid off. Tax correction form Can You Claim the Deduction Generally, you can claim the deduction if all of the following requirements are met. Tax correction form Your filing status is any filing status except married filing separately. Tax correction form No one else is claiming an exemption for you on his or her tax return. Tax correction form You are legally obligated to pay interest on a qualified student loan. Tax correction form You paid interest on a qualified student loan. Tax correction form Claiming an exemption for you. Tax correction form   Another taxpayer is claiming an exemption for you if he or she lists your name and other required information on his or her Form 1040 (or Form 1040A), line 6c, or Form 1040NR, line 7c. Tax correction form Example 1. Tax correction form During 2013, Josh paid $600 interest on his qualified student loan. Tax correction form Only he is legally obligated to make the payments. Tax correction form No one claimed an exemption for Josh for 2013. Tax correction form Assuming all other requirements are met, Josh can deduct the $600 of interest he paid on his 2013 Form 1040 or 1040A. Tax correction form Example 2. Tax correction form During 2013, Jo paid $1,100 interest on her qualified student loan. Tax correction form Only she is legally obligated to make the payments. Tax correction form Jo's parents claimed an exemption for her on their 2013 tax return. Tax correction form In this case, neither Jo nor her parents may deduct the student loan interest Jo paid in 2013. Tax correction form Interest paid by others. Tax correction form   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. Tax correction form Example 1. Tax correction form Darla obtained a qualified student loan to attend college. Tax correction form After Darla's graduation from college, she worked as an intern for a nonprofit organization. Tax correction form As part of the internship program, the nonprofit organization made an interest payment on behalf of Darla. Tax correction form This payment was treated as additional compensation and reported in box 1 of her Form W-2. Tax correction form Assuming all other qualifications are met, Darla can deduct this payment of interest on her tax return. Tax correction form Example 2. Tax correction form Ethan obtained a qualified student loan to attend college. Tax correction form After graduating from college, the first monthly payment on his loan was due in December. Tax correction form As a gift, Ethan's mother made this payment for him. Tax correction form No one is claiming a dependency exemption for Ethan on his or her tax return. Tax correction form Assuming all other qualifications are met, Ethan can deduct this payment of interest on his tax return. Tax correction form 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, as home mortgage interest). Tax correction form Figuring the Deduction Your student loan interest deduction for 2013 is generally the smaller of: $2,500, or The interest you paid in 2013. Tax correction form However, the amount determined above may be gradually reduced (phased out) or eliminated based on your filing status and MAGI as explained below. Tax correction form You can use Worksheet 4-1. Tax correction form Student Loan Interest Deduction Worksheet (at the end of this chapter) to figure both your MAGI and your deduction. Tax correction form Form 1098-E. Tax correction form   To help you figure your student loan interest deduction, you should receive Form 1098-E. Tax correction form 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. Tax correction form   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. Tax correction form Other interest payments, such as certain loan origination fees and capitalized interest, may not appear on the form you receive. Tax correction form However, if you pay qualifying interest that is not included on Form 1098-E, you can also deduct those amounts. Tax correction form See Allocating Payments Between Interest and Principal , earlier. Tax correction form    The lender may ask for a completed Form W-9S, or similar statement to obtain the borrower's name, address, and taxpayer identification number. Tax correction form The form may also be used by the borrower to certify that the student loan was incurred solely to pay for qualified education expenses. Tax correction form Effect of the Amount of Your Income on the Amount of Your Deduction The amount of your student loan interest deduction 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). Tax correction form 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). Tax correction form Modified adjusted gross income (MAGI). Tax correction form   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return before subtracting any deduction for student loan interest. Tax correction form However, as discussed below, there may be other modifications. Tax correction form Table 4-2 shows how the amount of your MAGI can affect your student loan interest deduction. Tax correction form Table 4-2. Tax correction form Effect of MAGI on Student Loan Interest Deduction IF your filing status is. Tax correction form . Tax correction form . Tax correction form AND your MAGI is. Tax correction form . Tax correction form . Tax correction form THEN your student loan interest deduction is. Tax correction form . Tax correction form . Tax correction form single,  head of household, or qualifying widow(er) not more than $60,000 not affected by the phaseout. Tax correction form more than $60,000  but less than $75,000 reduced because of the phaseout. Tax correction form $75,000 or more eliminated by the phaseout. Tax correction form married filing joint return not more than $125,000 not affected by the phaseout. Tax correction form more than $125,000 but less than $155,000 reduced because of the phaseout. Tax correction form $155,000 or more eliminated by the phaseout. Tax correction form MAGI when using Form 1040A. Tax correction form   If you file Form 1040A, your MAGI is the AGI on line 22 of that form figured without taking into account any amount on line 18 (student loan interest deduction) and line 19 (tuition and fees deduction). Tax correction form MAGI when using Form 1040. Tax correction form   If you file Form 1040, your MAGI is the AGI on line 38 of that form figured without taking into account any amount on line 33 (student loan interest deduction), line 34 (tuition and fees deduction), or line 35 (domestic production activities deduction), and modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. Tax correction form MAGI when using Form 1040NR. Tax correction form   If you file Form 1040NR, your MAGI is the AGI on line 36 of that form figured without taking into account any amount on line 33 (student loan interest deduction) and line 34 (domestic production activities deduction). Tax correction form MAGI when using Form 1040NR-EZ. Tax correction form   If you file Form 1040NR-EZ, your MAGI is the AGI on line 10 of that form figured without taking into account any amount on line 9 (student loan interest deduction). Tax correction form Phaseout. Tax correction form   If your MAGI is within the range of incomes where the credit must be reduced, you must figure your reduced deduction. Tax correction form To figure the phaseout, multiply your interest deduction (before the phaseout) by a fraction. Tax correction form The numerator is your MAGI minus $60,000 ($125,000 in the case of a joint return). Tax correction form The denominator is $15,000 ($30,000 in the case of a joint return). Tax correction form Subtract the result from your deduction (before the phaseout) to give you the amount you can deduct. Tax correction form Example 1. Tax correction form During 2013 you paid $800 interest on a qualified student loan. Tax correction form Your 2013 MAGI is $145,000 and you are filing a joint return. Tax correction form You must reduce your deduction by $533, figured as follows. Tax correction form   $800 × $145,000 − $125,000  $30,000 = $533   Your reduced student loan interest deduction is $267 ($800 − $533). Tax correction form Example 2. Tax correction form The facts are the same as in Example 1 except that you paid $2,750 interest. Tax correction form Your maximum deduction for 2013 is $2,500. Tax correction form You must reduce your maximum deduction by $1,667, figured as follows. Tax correction form   $2,500 × $145,000 − $125,000  $30,000 = $1,667   In this example, your reduced student loan interest deduction is $833 ($2,500 − $1,667). Tax correction form Which Worksheet To Use Generally, you figure the deduction using the Student Loan Interest Deduction Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR. Tax correction form However, if you are filing Form 2555, Foreign Earned Income, Form 2555-EZ, Foreign Earned Income Exclusion, or Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa, or you are excluding income from sources within Puerto Rico, you must complete Worksheet 4-1. Tax correction form Student Loan Interest Deduction Worksheet at the end of this chapter. Tax correction form Claiming the Deduction The student loan interest deduction is an adjustment to income. Tax correction form To claim the deduction, enter the allowable amount on line 33 (Form 1040), line 18 (Form 1040A), line 33 (Form 1040NR), or line 9 (Form 1040NR-EZ). Tax correction form Worksheet 4-1. Tax correction form Student Loan Interest Deduction Worksheet Use this worksheet instead of the worksheet in the Form 1040 instructions if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico. Tax correction form Before using this worksheet, you must complete Form 1040, lines 7 through 32, plus any amount to be entered on the dotted line next to line 36. Tax correction form 1. Tax correction form Enter the total interest you paid in 2013 on qualified student loans. Tax correction form Do not enter  more than $2,500 1. Tax correction form   2. Tax correction form Enter the amount from Form 1040, line 22 2. Tax correction form       3. Tax correction form Enter the total of the amounts from Form 1040,  lines 23 through 32 3. Tax correction form           4. Tax correction form Enter the total of any amounts entered on the dotted line next to Form 1040, line 36 4. Tax correction form           5. Tax correction form Add lines 3 and 4 5. Tax correction form       6. Tax correction form Subtract line 5 from line 2 6. Tax correction form       7. Tax correction form Enter any foreign earned income exclusion and/or housing  exclusion (Form 2555, line 45, or Form 2555-EZ, line 18) 7. Tax correction form       8. Tax correction form Enter any foreign housing deduction (Form 2555, line 50) 8. Tax correction form       9. Tax correction form Enter the amount of income from Puerto Rico you are excluding 9. Tax correction form       10. Tax correction form Enter the amount of income from American Samoa  you are excluding (Form 4563, line 15) 10. Tax correction form       11. Tax correction form Add lines 6 through 10. Tax correction form This is your modified adjusted gross income 11. Tax correction form   12. Tax correction form Enter the amount shown below for your filing status 12. Tax correction form     •Single, head of household, or qualifying widow(er)—$60,000       •Married filing jointly—$125,000     13. Tax correction form Is the amount on line 11 more than the amount on line 12?       □ No. Tax correction form Skip lines 13 and 14, enter -0- on line 15, and go to line 16. Tax correction form       □ Yes. Tax correction form Subtract line 12 from line 11 13. Tax correction form   14. Tax correction form Divide line 13 by $15,000 ($30,000 if married filing jointly). Tax correction form Enter the result as a decimal  (rounded to at least three places). Tax correction form If the result is 1. Tax correction form 000 or more, enter 1. Tax correction form 000 14. Tax correction form . Tax correction form 15. Tax correction form Multiply line 1 by line 14 15. Tax correction form   16. Tax correction form Student loan interest deduction. Tax correction form Subtract line 15 from line 1. Tax correction form Enter the result here  and on Form 1040, line 33. Tax correction form Do not include this amount in figuring any other  deduction on your return (such as on Schedule A, C, E, etc. Tax correction form ) 16. Tax correction form   Prev  Up  Next   Home   More Online Publications
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IRS Non-Retaliation Policy

Section 1203 of the IRS Restructuring and Reform Act of 1998 (RRA ’98), created a statutory provision requiring termination of IRS employment for misconduct.  Section 1203(a) provides that the Commissioner of the Internal Revenue shall terminate the employment of any employee of the Internal Revenue Service if there is a final administrative or judicial determination that such employee committed any act or omission described under subsection (b) in the performance of the employee’s official duties. One of the acts described in subsection (b) is retaliation.

Section 1203 (b)(6) provides that:

Violations of the Internal Revenue Code of 1986, Department of Treasury regulations, or policies of the Internal Revenue Service (including the Internal Revenue Manual) for the purpose of retaliating against, or harassing, a taxpayer, taxpayer representative, or other employee of the Internal Revenue Service.

is an act or omission requiring termination.

IRM Section 6.751.1.1 addresses administrative disciplinary matters.  Exhibit 6.751.1-1 is the Internal Revenue Service Guide for Penalty Determinations. Violations of RRA ’98, Section 1203 (b)(6) is included  in the Guide for Penalty Determinations.  This Exhibit shows that the penalty for a First Offense for an RRA ‘98 1203 (b)(6) offense is removal.

Page Last Reviewed or Updated: 05-Nov-2013

The Tax Correction Form

Tax correction form Part Three -   Gains and Losses The four chapters in this part discuss investment gains and losses, including how to figure your basis in property. Tax correction form A gain from selling or trading stocks, bonds, or other investment property may be taxed or it may be tax free, at least in part. Tax correction form A loss may or may not be deductible. Tax correction form These chapters also discuss gains from selling property you personally use — including the special rules for selling your home. Tax correction form Nonbusiness casualty and theft losses are discussed in chapter 25 in Part Five. Tax correction form Table of Contents 13. Tax correction form   Basis of PropertyIntroduction Useful Items - You may want to see: Cost BasisReal Property Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostProperty Received for Services Taxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Transferred From a Spouse Property Received as a Gift Inherited Property Property Changed From Personal to Business or Rental Use Stocks and Bonds 14. Tax correction form   Sale of PropertyReminder Introduction Useful Items - You may want to see: Sales and TradesWhat Is a Sale or Trade? How To Figure Gain or Loss Nontaxable Trades Transfers Between Spouses Related Party Transactions Capital Gains and LossesCapital or Ordinary Gain or Loss Capital Assets and Noncapital Assets Holding Period Nonbusiness Bad Debts Wash Sales Rollover of Gain From Publicly Traded Securities 15. Tax correction form   Selling Your HomeReminder Introduction Useful Items - You may want to see: Main Home Figuring Gain or LossSelling Price Amount Realized Adjusted Basis Amount of Gain or Loss Dispositions Other Than Sales Determining Basis Excluding the GainMaximum Exclusion Ownership and Use Tests Reduced Maximum Exclusion Business Use or Rental of Home Reporting the SaleSeller-financed mortgage. Tax correction form More information. Tax correction form Special SituationsException for sales to related persons. Tax correction form Recapturing (Paying Back) a Federal Mortgage Subsidy 16. Tax correction form   Reporting Gains and Losses What's New Introduction Useful Items - You may want to see: Reporting Capital Gains and Losses Exception 1. Tax correction form Exception 2. Tax correction form File Form 1099-B or Form 1099-S with the IRS. Tax correction form Capital Losses Capital Gain Tax Rates Prev  Up  Next   Home   More Online Publications