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File free taxes Index Symbols 529 program (see Qualified tuition program (QTP)) A Academic period American opportunity credit, Academic period. File free taxes Lifetime learning credit, Academic period. File free taxes Student loan interest deduction, Academic period. File free taxes Tuition and fees deduction, Academic period. File free taxes Accountable plans, Accountable Plans, Allocating your reimbursements for meals. File free taxes Additional tax Coverdell ESA On excess contributions, Additional Tax on Excess Contributions, Figuring and reporting the additional tax. File free taxes On taxable distributions, Additional Tax on Taxable Distributions IRA distributions, education exception, Education Exception to Additional Tax on Early IRA Distributions Qualified tuition program (QTP), on taxable distributions, Additional Tax on Taxable Distributions Adjusted qualified education expenses (see Qualified education expenses) American opportunity credit Adjustments to qualified education expenses, Adjustments to Qualified Education Expenses Claiming dependent's expenses, Who Can Claim a Dependent's Expenses, Tuition reduction. File free taxes Tuition reduction, Tuition reduction. File free taxes Claiming the credit, Can You Claim the Credit, Who Cannot Claim the Credit, Claiming the Credit Qualifying to claim (Figure 2-1), Coordination with Coverdell ESA distributions, Figuring the Taxable Portion of a Distribution Coordination with qualified tuition program (QTP) distributions, Coordination With American Opportunity and Lifetime Learning Credits Eligible educational institution, Eligible educational institution. File free taxes Eligible student, Who Is an Eligible Student Requirements (Figure 2-2), Expenses qualifying for, What Expenses Qualify, Adjustments to Qualified Education Expenses Figuring the credit, Figuring the Credit Income level, effect on amount of credit, Effect of the Amount of Your Income on the Amount of Your Credit, Phaseout. File free taxes Income limits, Effect of the Amount of Your Income on the Amount of Your Credit, Phaseout. File free taxes Modified adjusted gross income (MAGI), Modified adjusted gross income (MAGI). File free taxes Worksheet 2-1, Claiming the Credit Overview of American opportunity credit (Table 2-1), Introduction Phaseout, Phaseout. File free taxes Qualified education expenses, Qualified Education Expenses Tax benefit of, What is the tax benefit of the American opportunity credit. File free taxes Armed Forces Health Professions Scholarship and Financial Assistance Program, Exceptions. File free taxes Assistance (see Tax help) Athletic scholarships, Athletic Scholarships B Bar review course, Bar or CPA Review Course Bonds, education savings (see Education savings bond program) Business deduction for work-related education, Business Deduction for Work-Related Education, Illustrated Example Accountable plans, Accountable Plans, Allocating your reimbursements for meals. File free taxes Adjustments to qualifying work-related education expenses, Adjustments to Qualifying Work-Related Education Expenses Allocating meal reimbursements, Allocating your reimbursements for meals. File free taxes Deductible education expenses, What Expenses Can Be Deducted, Adjustments to Qualifying Work-Related Education Expenses Deducting business expenses, Deducting Business Expenses, Impairment-Related Work Expenses Double benefit not allowed, No Double Benefit Allowed Education required by employer or by law, Education Required by Employer or by Law Education to maintain or improve skills, Education To Maintain or Improve Skills Education to meet minimum requirements, Education To Meet Minimum Requirements, Certification in a new state. File free taxes Education to qualify for new trade or business, Education That Qualifies You for a New Trade or Business, Teaching and Related Duties Excess expenses, accountable plan, Excess expenses. File free taxes , Allocating your reimbursements for meals. File free taxes Indefinite absence, Education during indefinite absence. File free taxes Maintaining skills vs. File free taxes qualifying for new job, Maintaining skills vs. File free taxes qualifying for new job. File free taxes Nonaccountable plans, Nonaccountable Plans Nondeductible expenses, Nondeductible expenses. File free taxes Qualified education expenses, What Expenses Can Be Deducted, Adjustments to Qualifying Work-Related Education Expenses Recordkeeping requirements, Recordkeeping, Examples of records to keep. File free taxes Reimbursements, treatment of, How To Treat Reimbursements, Reimbursements for nondeductible expenses. File free taxes Tax benefit of, What is the tax benefit of taking a business deduction for work-related education. File free taxes Tax-free educational assistance, Tax-free educational assistance. File free taxes Teachers, Requirements for Teachers, Teaching and Related Duties Temporary absence to acquire education, Education during temporary absence. File free taxes Transportation expenses, Transportation Expenses, Using your car. File free taxes Travel expenses, Travel Expenses C Cancellation of student loan (see Student loan cancellation) Candidate for a degree Scholarships and fellowships, Candidate for a degree. File free taxes Change of designated beneficiary Coverdell ESA, Changing the Designated Beneficiary Qualified tuition program, Changing the Designated Beneficiary Collapsed loans, Interest on refinanced student loans. File free taxes Comprehensive or bundled fees American opportunity credit, Comprehensive or bundled fees. File free taxes Lifetime learning credit, Comprehensive or bundled fees. File free taxes Tuition and fees deduction, Comprehensive or bundled fees. File free taxes Consolidated loans used to refinance student loans, Interest on refinanced student loans. File free taxes Conventions outside U. File free taxes S. File free taxes , Cruises and conventions. File free taxes Coverdell education savings account (ESA), Coverdell Education Savings Account (ESA), Figuring the Taxable Portion of a Distribution, Coordination With American Opportunity and Lifetime Learning Credits, Worksheet 7-3. File free taxes Coverdell ESA—Taxable Distributions and Basis Additional tax On excess contributions, Additional Tax on Excess Contributions, Figuring and reporting the additional tax. File free taxes On taxable distributions, Additional Tax on Taxable Distributions Assets to be distributed at age 30 or death of beneficiary, When Assets Must Be Distributed Contribution limits, Contribution Limits, Figuring the limit. File free taxes Figuring the limit (Worksheet 6-2), Figuring the limit. File free taxes Contributions to, Contributions, Figuring and reporting the additional tax. File free taxes Table 7-2, Contributions Coordination with American opportunity and lifetime learning credits, Coordination With American Opportunity and Lifetime Learning Credits Coordination with qualified tuition program (QTP), Coordination With Qualified Tuition Program (QTP) Distributions Defined, What Is a Coverdell ESA Distributions, Distributions, How To Figure the Taxable Earnings Overview (Table 7-3), Distributions Divorce, transfer due to, Transfer Because of Divorce Eligible educational institution, Eligible Educational Institution Figuring taxable portion of distribution, Figuring the Taxable Portion of a Distribution Worksheet 7-3, Worksheet 7-3. File free taxes Coverdell ESA—Taxable Distributions and Basis Figuring the taxable earnings in required distribution, How To Figure the Taxable Earnings Losses, Losses on Coverdell ESA Investments Modified adjusted gross income (MAGI), Modified adjusted gross income (MAGI). File free taxes , MAGI when using Form 1040NR-EZ. File free taxes Worksheet 6-1, Worksheet 7-1. File free taxes MAGI for a Coverdell ESA Overview (Table 6-1), Coverdell Education Savings Account (ESA) Qualified education expenses, Qualified Education Expenses, Qualified Elementary and Secondary Education Expenses Rollovers, Rollovers Tax benefit of, What is the tax benefit of the Coverdell ESA. File free taxes Tax-free distributions, Tax-Free Distributions Taxable distributions, Taxable Distributions, Figuring the additional tax. File free taxes Worksheet 7-3 to figure, Worksheet 7-3. File free taxes Coverdell ESA—Taxable Distributions and Basis Transfers, Rollovers CPA review course, Bar or CPA Review Course Credits American opportunity (see American opportunity credit) Lifetime learning (see Lifetime learning credit) Cruises, educational, Cruises and conventions. File free taxes D Deductions (see Business deduction for work-related education) Designated beneficiary Coverdell ESA, What Is a Coverdell ESA, Changing the Designated Beneficiary Qualified tuition program (QTP), Designated beneficiary. File free taxes , Changing the Designated Beneficiary Disabilities, persons with Impairment-related work expenses, Impairment-Related Work Expenses Distributions (see specific benefit ) Divorce Coverdell ESA transfer due to, Transfer Because of Divorce Expenses paid under decree American opportunity credit, Expenses paid by dependent. File free taxes Lifetime learning credit, Expenses paid by dependent. File free taxes Tuition and fees deduction, Expenses paid under divorce decree. File free taxes Double benefit not allowed American opportunity credit, No Double Benefit Allowed Lifetime learning credit, No Double Benefit Allowed Student loan interest deduction, No Double Benefit Allowed Tuition and fees deduction, No Double Benefit Allowed Work-related education, No Double Benefit Allowed E Early distributions from IRAs, Education Exception to Additional Tax on Early IRA Distributions, Reporting Early Distributions Eligible educational institution, Eligible educational institution. File free taxes Figuring amount not subject to 10% tax, Figuring the Amount Not Subject to the 10% Tax Qualified education expenses, Qualified education expenses. File free taxes Reporting, Reporting Early Distributions Education IRA (see Coverdell education savings account (ESA)) Education loans (see Student loan interest deduction) Education savings account (see Coverdell education savings account (ESA)) Education savings bond program Cashing in bonds tax free, Who Can Cash In Bonds Tax Free, MAGI when using Form 1040. File free taxes Claiming dependent's exemption, Dependent for whom you claim an exemption. File free taxes Claiming exclusion, Claiming the Exclusion Eligible educational institution, Eligible educational institution. File free taxes Figuring tax-free amount, Figuring the Tax-Free Amount Income level, effect on amount of exclusion, Effect of the Amount of Your Income on the Amount of Your Exclusion Modified adjusted gross income (MAGI), Modified adjusted gross income (MAGI). File free taxes , MAGI when using Form 1040. File free taxes Phaseout, Effect of the Amount of Your Income on the Amount of Your Exclusion Qualified education expenses, Qualified education expenses. File free taxes Educational assistance, employer-provided (see Employer-provided educational assistance) Eligible educational institution American opportunity credit, Eligible educational institution. File free taxes Cancellation of student loan, Eligible educational institution. File free taxes Coverdell ESA, Eligible Educational Institution Early distributions from IRAs, Eligible educational institution. File free taxes Education savings bond program, Eligible educational institution. File free taxes Lifetime learning credit, Eligible educational institution. File free taxes Qualified tuition program (QTP), Eligible educational institution. File free taxes Qualified tuition reduction, Qualified Tuition Reduction Scholarships and fellowships, Eligible educational institution. File free taxes , Eligible educational institution. File free taxes Student loan cancellation, Eligible educational institution. File free taxes Student loan interest deduction, Eligible educational institution. File free taxes Tuition and fees deduction, Eligible educational institution. File free taxes Eligible elementary or secondary school Coverdell ESA, Eligible elementary or secondary school. File free taxes Eligible student American opportunity credit, Who Is an Eligible Student Lifetime learning credit, Who Is an Eligible Student Student loan interest deduction, Eligible student. File free taxes Tuition and fees deduction, Who Is an Eligible Student Employees Deducting work-related education expenses, Employees Employer-provided educational assistance, Employer-Provided Educational Assistance, Working condition fringe benefit. File free taxes ESAs (see Coverdell education savings account (ESA)) Estimated tax, Reminders Excess contributions Coverdell ESA, Additional Tax on Excess Contributions, Figuring and reporting the additional tax. File free taxes Excess expenses, accountable plan, Excess expenses. File free taxes , Allocating your reimbursements for meals. File free taxes Expenses (see specific benefit ) F Family members, beneficiary Coverdell ESA, Members of the beneficiary's family. File free taxes Qualified tuition program (QTP), Members of the beneficiary's family. File free taxes Fee-basis officials, work-related education deduction, Performing Artists and Fee-Basis Officials Fellowships (see Scholarships and fellowships) Figures (see Tables and figures) Financial aid (see Scholarships and fellowships) Form 1098-E Student loan interest deduction, Loan origination fee. File free taxes , Form 1098-E. File free taxes Form 1098-T, Reminders American opportunity credit, Form 1098-T. File free taxes Lifetime learning credit, Form 1098-T. File free taxes Tuition and fees deduction, Form 1098-T. File free taxes Form 1099-Q Coverdell ESA, Exceptions. File free taxes , Earnings and basis. File free taxes Qualified tuition program (QTP), Earnings and return of investment. File free taxes Form 1099-R Early distributions from IRAs, Reporting Early Distributions Form 2106, 50% limit on meals. File free taxes , Form 2106 or 2106-EZ. File free taxes Form 2106-EZ, 50% limit on meals. File free taxes , Form 2106 or 2106-EZ. File free taxes , Using Form 2106-EZ. File free taxes Filled-in example, Form 5329 Coverdell ESA, Figuring the additional tax. File free taxes Early distributions from IRAs, Reporting Early Distributions Qualified tuition program (QTP), Figuring the additional tax. File free taxes Form 8815, MAGI when using Form 1040. File free taxes , Claiming the Exclusion Form 8863 Filled-in examples, Form 8917 Filled-in examples, Form W-9S, Form 1098-T. File free taxes , Form 1098-T. File free taxes , Form 1098-E. File free taxes , Form 1098-T. File free taxes Free tax services, Free help with your tax return. File free taxes Fulbright grants, Fulbright Grants G Glossary, Glossary. File free taxes , Glossary, Transfer: Graduate education tuition reduction, Graduate Education Grants Fulbright, Fulbright Grants Pell, Pell Grants and Other Title IV Need-Based Education Grants Title IV need-based education, Pell Grants and Other Title IV Need-Based Education Grants H Half-time student American opportunity credit, Enrolled at least half-time. File free taxes Coverdell ESA, Half-time student. File free taxes Early distributions from IRAs, Half-time student. File free taxes Student loan interest deduction, Enrolled at least half-time. File free taxes Help (see Tax help) I Illustrated example of education credits (Appendix A), Appendix A. File free taxes Illustrated Example of Education Credits, Impairment-related work expenses Work-related education deduction, Impairment-Related Work Expenses Individual retirement arrangements (IRAs), Coverdell Education Savings Account (ESA) Early distributions (see Early distributions from IRAs) L Lifetime learning credit, Differences between the American opportunity and lifetime learning credits. File free taxes Academic period, Academic period. File free taxes Adjustments to qualified education expenses, Adjustments to Qualified Education Expenses Claiming dependent's expenses, Who Can Claim a Dependent's Expenses Tuition reduction, Tuition reduction. File free taxes Claiming the credit, Can You Claim the Credit, Who Cannot Claim the Credit, Claiming the Credit Qualifying to claim (Figure 3-1), Coordination with Coverdell ESA distributions, Figuring the Taxable Portion of a Distribution, Coordination With American Opportunity and Lifetime Learning Credits Coordination with qualified tuition program (QTP) distributions, Coordination With American Opportunity and Lifetime Learning Credits Eligible educational institution, Eligible educational institution. File free taxes Eligible student, Who Is an Eligible Student Expenses qualifying for, What Expenses Qualify, Amounts that do not reduce qualified education expenses. File free taxes Figuring the credit, Figuring the Credit, Claiming the Credit Income level, effect on amount of credit, Effect of the Amount of Your Income on the Amount of Your Credit Income limits, Effect of the Amount of Your Income on the Amount of Your Credit Modified adjusted gross income (MAGI), Modified adjusted gross income (MAGI). File free taxes Worksheet 3-1, MAGI when using Form 1040. File free taxes Overview (Table 3-1), Table 3-1. File free taxes Overview of the Lifetime Learning Credit Phaseout, Phaseout. File free taxes Qualified education expenses, Qualified Education Expenses, Amounts that do not reduce qualified education expenses. File free taxes Qualifying to claim (Figure 3-1), Tax benefit of, What is the tax benefit of the lifetime learning credit. File free taxes Loans Cancellation (see Student loan cancellation) Capitalized interest on student loan, Capitalized interest. File free taxes Origination fees on student loan, Loan origination fee. File free taxes Qualified education expenses paid with American opportunity credit, Academic period. File free taxes Lifetime learning credit, Paid with borrowed funds. File free taxes Student loan repayment assistance, Student Loan Repayment Assistance Losses, deducting Coverdell ESA, Losses on Coverdell ESA Investments Qualified tuition program (QTP), Losses on QTP Investments Luxury water transportation, Cruises and conventions. File free taxes M Mileage deduction for work-related education, What's New, Using your car. File free taxes Military academy cadets, Payment to Service Academy Cadets Missing children, photographs of, Reminders Modified adjusted gross income (MAGI) American opportunity credit Worksheet 2-1, Claiming the Credit Coverdell ESA, Modified adjusted gross income (MAGI). File free taxes , MAGI when using Form 1040NR-EZ. File free taxes Worksheet 6-1, Worksheet 7-1. 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File free taxes Nonaccountable plans Work-related education, Nonaccountable Plans P Pell grants, Pell Grants and Other Title IV Need-Based Education Grants, Coordination with Pell grants and other scholarships. File free taxes , Coordination with Pell grants and other scholarships. File free taxes Performing artists, work-related education deduction, Performing Artists and Fee-Basis Officials Phaseout American opportunity credit, Phaseout. File free taxes Education savings bond program, Effect of the Amount of Your Income on the Amount of Your Exclusion Lifetime learning credit, Phaseout. File free taxes Student loan interest deduction, Phaseout. File free taxes , Effect of the Amount of Your Income on the Amount of Your Deduction Publications (see Tax help) Q Qualified education expenses Adjustments to American opportunity credit, Adjustments to Qualified Education Expenses Coverdell ESA, Adjusted qualified education expenses. File free taxes Education savings bond program, Adjusted qualified education expenses. File free taxes Lifetime learning credit, Adjustments to Qualified Education Expenses Qualified tuition program (QTP), Adjusted qualified education expenses. File free taxes Student loan interest deduction, Adjustments to Qualified Education Expenses Tuition and fees deduction, Adjustments to Qualified Education Expenses Work-related education, Adjustments to Qualifying Work-Related Education Expenses American opportunity credit, Qualified Education Expenses, Adjustments to Qualified Education Expenses Coverdell ESA, Qualified Education Expenses, Qualified Elementary and Secondary Education Expenses Early distributions from IRAs, Qualified education expenses. File free taxes Education savings bond program, Qualified education expenses. File free taxes Expenses not qualified American opportunity credit, Expenses That Do Not Qualify, Comprehensive or bundled fees. 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File free taxes Qualified tuition program (QTP), Qualified Tuition Program (QTP), Changing the Designated Beneficiary Additional tax on taxable distributions, Additional Tax on Taxable Distributions Change of designated beneficiary, Changing the Designated Beneficiary Contributions to, How Much Can You Contribute Coordination with American opportunity and lifetime learning credits, Coordination With American Opportunity and Lifetime Learning Credits Coordination with Coverdell ESA distributions, Coordination With Coverdell ESA Distributions Defined, What Is a Qualified Tuition Program Eligible educational institution, Eligible educational institution. File free taxes Figuring taxable portion of distribution, Figuring the Taxable Portion of a Distribution, Losses on QTP Investments Losses, Losses on QTP Investments Qualified education expenses, Qualified education expenses. 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File free taxes Student Loan Interest Deduction Worksheet Student loan repayment assistance, Student Loan Repayment Assistance Surviving spouse Coverdell ESA transfer to, Exception for Transfer to Surviving Spouse or Family Member T Tables and figures American opportunity credit Eligible student requirements (Figure 2-2), Overview (Table 2-1), Introduction Qualifying to claim (Figure 2-1), Comparison of education tax benefits (Appendix B), Coverdell ESAs Contributions to (Table 7-2), Contribution Limits Distributions (Table 7-3), Distributions Overview (Table 6-1), Coverdell Education Savings Account (ESA) Education credits Overview of American opportunity credit (Table 2-1), Introduction Overview of lifetime learning credit (Table 3-1), Table 3-1. File free taxes Overview of the Lifetime Learning Credit Lifetime learning credit Overview (Table 3-1), Table 3-1. 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File free taxes Table 6-2, Table 6-2. File free taxes Effect of MAGI on Maximum Tuition and Fees Deduction Worksheet 6-1, Worksheet 6-1. File free taxes MAGI for the Tuition and Fees Deduction Overview (Table 4-1), Table 4-1. File free taxes Student Loan Interest Deduction at a Glance Overview (Table 6-1), Table 6-1. File free taxes Tuition and Fees Deduction at a Glance Qualified education expenses, What Expenses Qualify, Adjustments to Qualified Education Expenses Qualifying for deduction, Can You Claim the Deduction Tax benefit of, What is the tax benefit of the tuition and fees deduction. File free taxes Tax-free educational assistance, Tax-free educational assistance. File free taxes Tuition reduction American opportunity credit, Tuition reduction. File free taxes Lifetime learning credit, Tuition reduction. File free taxes Qualified, Qualified Tuition Reduction, How To Report Tuition and fees deduction, Tuition reduction. File free taxes U U. File free taxes S. File free taxes savings bonds, Qualified U. File free taxes S. File free taxes savings bonds. File free taxes Unclaimed reimbursement Work-related education, Unclaimed reimbursement. File free taxes V Veterans' benefits, Veterans' Benefits Voluntary interest payments, Voluntary interest payments. File free taxes W Withholding, Analyzing your tax withholding. File free taxes Work-related education (see Business deduction for work-related education) Working condition fringe benefit, Working condition fringe benefit. File free taxes Worksheets Coverdell ESA Contribution limit (Worksheet 6-2), Figuring the limit. File free taxes MAGI, calculation of (Worksheet 6-1), Worksheet 7-1. File free taxes MAGI for a Coverdell ESA Taxable distributions and basis (Worksheet 6-3), Worksheet 7-3. File free taxes Coverdell ESA—Taxable Distributions and Basis Taxable distributions and basis (Worksheet 7-3), Worksheet 7-3. File free taxes Coverdell ESA—Taxable Distributions and Basis Lifetime learning credit MAGI calculation (Worksheet 3-1), MAGI when using Form 1040. File free taxes Scholarships and fellowships, taxable income (Worksheet 1-1), Worksheet 1-1. File free taxes Student loan interest deduction (Worksheet 4-1), Worksheet 4-1. File free taxes Student Loan Interest Deduction Worksheet Tuition and fees deduction, MAGI calculation (Worksheet 6-1), Worksheet 6-1. File free taxes MAGI for the Tuition and Fees Deduction Prev  Up     Home   More Online Publications
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What's Hot

Here you'll find items of current interest — new programs, recent guidance or timely reminders.


Fuel Tax Credit Extensions: Frequently Asked Questions

These Q&As tell taxpayers how to claim the credits for qualifying sales or uses during 2012. It also describes changes to the cellulosic biofuel credit for 2013.


Legislation

In the past few years, there have been several laws passed that have tax implications. For more information, visit our pages on:


For Same-Sex Couples and Certain Domestic Partners

The following questions and answers provide information to individuals of the same sex who are lawfully married (same-sex spouses). 

Additional information may be found in: 

The following questions and answers provide information to individuals of the same sex and opposite sex who are in registered domestic partnerships, civil unions, or other similar formal relationships that are not marriages under state law. These individuals are not considered as married or spouses for federal tax purposes.

Additional information on these issues may be found in Notice 2013-61, Revenue Ruling 2013-17 and news release IR-2013-72, Treasury and IRS Announce That All Legal Same-Sex Marriages Will Be Recognized For Federal Tax Purposes; Ruling Provides Certainty, Benefits and Protections Under Federal Tax Law for Same-Sex Married Couples. 


Tax Return Preparer Requirements

The IRS has undertaken several initiatives to reach tax return preparers with education and enforcement. All paid preparers must register with the IRS and obtain a Preparer Tax Identification Number (PTIN). Find out more.


Consumer Alerts

‪Please note that the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

  • ‪If you get an unsolicited email that appears to be from the IRS, please report it by sending it to phishing@irs.gov. ‪
  • If you find a suspicious website that claims to be the IRS, please send the site’s URL by email to phishing@irs.gov, using the subject line: suspicious website.

For more information on phishing scams, please see Suspicious e-Mails and Identity Theft.

March 2014
New Email Phishing Scam

The IRS has been alerted to a new email phishing scam. The emails appear to be from the IRS Taxpayer Advocate Service and include a bogus case number and the following message:

“Your reported 2013 income is flagged for review due to a document processing error. Your case has been forwarded to the Taxpayer Advocate Service for resolution assistance. To avoid delays processing your 2013 filing contact the Taxpayer Advocate Service for resolution assistance.”

The recipient is directed to click on links that supposedly provide information about the "advocate" assigned to their case or that let them "review reported income."  The links lead to web pages that solicit personal information.

Taxpayers who get these messages should not respond to the email or click on the links. Instead, they should forward the scam emails to the IRS at phishing@irs.gov. For more information, visit the IRS's Report Phishing web page.

The Taxpayer Advocate Service is a legitimate IRS organization that helps taxpayers resolve federal tax issues that have not been resolved through the normal IRS channels. The IRS, including TAS, does not initiate contact with taxpayers by email, texting or any social media.

November 2013
Typhoon Haiyan Relief Scams

Possible scams are taking place in the wake of Typhoon Haiyan. On Nov. 8, 2013, Typhoon Haiyan — known as Yolanda in the Philippines — made landfall in the central Philippines, bringing strong winds and heavy rains that have resulted in flooding, landslides, and widespread damage.

Following major disasters, it is common for scam artists to impersonate charities to get money or private information from well-intentioned taxpayers. Such fraudulent schemes may involve contact by telephone, social media, email or in-person solicitations.

October 2013
Telephone Scam Now Making the Rounds

The IRS warns consumers about a sophisticated phone scam targeting taxpayers, including recent immigrants, throughout the country. Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. Characteristics of this scam include:

  • Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves.
  • Scammers may be able to recite the last four digits of a victim’s Social Security Number.
  • Scammers spoof the IRS toll-free number on caller ID to make it appear that it’s the IRS calling.
  • Scammers sometimes send bogus IRS emails to some victims to support their bogus calls.
  • Victims hear background noise of other calls being conducted to mimic a call site.
  • After threatening victims with jail time or driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.

If you know you owe taxes or you think you might owe taxes, call the IRS at 1-800-829-1040. If you know you don’t owe taxes or have no reason to think that you owe any taxes (for example, you’ve never received a bill or the caller made some bogus threats as described above), call and report the incident to the Treasury Inspector General for Tax Administration at 1-800-366-4484. 

October 2012
Don't Fall for Phony IRS Websites

The IRS warns consumers about a new tax scam that uses a website that mimics the IRS e-Services online registration page.

‪The actual IRS e-Services page offers web-based products for tax preparers, not the general public. The phony web page looks almost identical to the real one.

The IRS gets many reports of fake websites like this. Criminals use these sites to lure people into providing personal and financial information that may be used to steal the victim’s money or identity. Typically, identity thieves empty the victim’s financial accounts, run up charges on the victim’s existing credit cards or apply for new loans, credit cards, services or benefits in the victim’s name.

‪The address of the official IRS website is www.irs.gov. Don’t be misled by sites claiming to be the IRS but ending in .com, .net, .org or other designations instead of .gov.

The IRS website has information that can help you protect yourself from tax scams of all kinds. Search the site using the term: phishing.


Interim Changes to the ITIN Application Process

Effective June 22, 2012, the IRS has made interim changes that affect the Individual Taxpayer Identification Number (ITIN) application process. Some of the information below, including the documentation requirements for individuals seeking an ITIN, has been superseded by these changes. Taxpayers and their representatives should review these changes, which are further explained in these Frequently Asked Questions, before requesting an ITIN.

On Oct. 2, 2012, the IRS implemented clarifying changes to its temporary procedures for issuing ITINs for noncitizens with tax Extensions and many foreign students.

Beginning Jan. 1, 2013, the IRS implemented improvements to the Individual Taxpayer Identification Number (ITIN) application process. These changes were developed based on an extensive review and feedback from a variety of stakeholders. The updated ITIN procedures build on changes announced last summer and fall to better protect the integrity of the ITIN application process and strengthen the refund process. Read about the new program changes and check out the latest frequently asked questions for more information.


Help for Victims of Ponzi Investment Schemes

If you've been the victim of a Ponzi scheme, find out more about how it affects your tax situation. We also have some new Q&As about distributions received from a trustee/receiver.


Principal Reduction Alternative Under the Home Affordable Modification Program

Find the answers to your tax questions on the Principal Reduction Alternative under the Home Affordable Modification Program (HAMP), which was established by the Departments of the Treasury and Housing and Urban Development to help distressed homeowners lower their monthly mortgage payments. The Principal Reduction Alternative does not apply to loans that are owned or guaranteed by Fannie Mae or Freddie Mac.


Tax Scams

Don't fall victim to tax scams. Remember — if it sounds too good to be true, it probably is. If you know of a tax fraud, you can report it to the IRS by sending completed Form 3949-A, Information Referral, to Internal Revenue Service, Fresno, CA 93888. Download the form or call 1-800-829-3676 to order by mail.

For recent scams, see:

  • IR-2014-16, IRS Releases the “Dirty Dozen” Tax Scams for 2014; Identity Theft, Phone Scams Lead List
  • IR-2013-33, IRS Releases the Dirty Dozen Tax Scams for 2013
  • IR-2012-23, IRS Releases the Dirty Dozen Tax Scams for 2012
  • IR-2011-73, IRS Urges Taxpayers to Avoid Becoming Victims of Tax Scam
  • IR-2011-39, Don’t Fall Prey to the 2011 Dirty Dozen Tax Scams

Education is the best way to avoid the pitfalls of these “too good to be true” tax scams. For additional information, see:


Phishing Scams

The IRS does not send taxpayers unsolicited emails about their tax accounts, tax situations or personal tax issues. If you receive such an email, most likely it's a scam.

IRS impersonation schemes flourish during filing season. These schemes may take place via phone, fax, Internet sites, social networking sites and particularly email. 

Many impersonations are identity theft scams that try to trick victims into revealing personal and financial information that can be used to access their financial accounts. Some email scams contain attachments or links that, when clicked, download malicious code (virus) that infects your computer or direct you to a bogus form or site posing as a genuine IRS form or web site. 

Some impersonations may be commercial Internet sites that consumers unknowingly visit, thinking they're accessing the genuine IRS website, www.IRS.gov. However, such sites have no connection to the IRS.

For more information on scams and what to do if you're subject to one, see: 


Tax Avoidance Transactions

Read up on the IRS's campaign against abusive tax avoidance transactions. Taxpayers with unreported income relating to offshore transactions who wish to voluntarily disclose the information to the IRS can find information on the process.


Why Pay Taxes? The Truth about Frivolous Tax Arguments

The Truth About Frivolous Tax Arguments (PDF 405K) addresses some of the more common false "legal" arguments made by individuals and groups who oppose compliance with the federal tax laws. These arguments are grouped under six general categories, with variations within each category. Each contention is briefly explained, followed by a discussion of the legal authority that rejects the contention. The second section deals with frivolous arguments encountered in collection due process cases. The final section illustrates penalties imposed on those pursuing frivolous cases.

 

Page Last Reviewed or Updated: 28-Mar-2014

The File Free Taxes

File free taxes 5. File free taxes   Personal Use of Dwelling Unit (Including Vacation Home) Table of Contents Dividing Expenses Dwelling Unit Used as a HomeMain home. File free taxes Shared equity financing agreement. File free taxes Donation of use of the property. File free taxes Examples. File free taxes Days used for repairs and maintenance. File free taxes Days used as a main home before or after renting. File free taxes Reporting Income and DeductionsNot used as a home. File free taxes Used as a home but rented less than 15 days. File free taxes Used as a home and rented 15 days or more. File free taxes If you have any personal use of a dwelling unit (including a vacation home) that you rent, you must divide your expenses between rental use and personal use. File free taxes In general, your rental expenses will be no more than your total expenses multiplied by a fraction; the denominator of which is the total number of days the dwelling unit is used and the numerator of which is the total number of days actually rented at a fair rental price. File free taxes Only your rental expenses may deducted on Schedule E (Form 1040). File free taxes Some of your personal expenses may be deductible if you itemize your deductions on Schedule A (Form 1040). File free taxes You must also determine if the dwelling unit is considered a home. File free taxes The amount of rental expenses that you can deduct may be limited if the dwelling unit is considered a home. File free taxes Whether a dwelling unit is considered a home depends on how many days during the year are considered to be days of personal use. File free taxes There is a special rule if you used the dwelling unit as a home and you rented it for less than 15 days during the year. File free taxes Dwelling unit. File free taxes   A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. File free taxes It also includes all structures or other property belonging to the dwelling unit. File free taxes A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities. File free taxes   A dwelling unit does not include property (or part of the property) used solely as a hotel, motel, inn, or similar establishment. File free taxes Property is used solely as a hotel, motel, inn, or similar establishment if it is regularly available for occupancy by paying customers and is not used by an owner as a home during the year. File free taxes Example. File free taxes You rent a room in your home that is always available for short-term occupancy by paying customers. File free taxes You do not use the room yourself and you allow only paying customers to use the room. File free taxes This room is used solely as a hotel, motel, inn, or similar establishment and is not a dwelling unit. File free taxes Dividing Expenses If you use a dwelling unit for both rental and personal purposes, divide your expenses between the rental use and the personal use based on the number of days used for each purpose. File free taxes When dividing your expenses, follow these rules. File free taxes Any day that the unit is rented at a fair rental price is a day of rental use even if you used the unit for personal purposes that day. File free taxes (This rule does not apply when determining whether you used the unit as a home. File free taxes ) Any day that the unit is available for rent but not actually rented is not a day of rental use. File free taxes Fair rental price. File free taxes   A fair rental price for your property generally is the amount of rent that a person who is not related to you would be willing to pay. File free taxes The rent you charge is not a fair rental price if it is substantially less than the rents charged for other properties that are similar to your property in your area. File free taxes   Ask yourself the following questions when comparing another property with yours. File free taxes Is it used for the same purpose? Is it approximately the same size? Is it in approximately the same condition? Does it have similar furnishings? Is it in a similar location? If any of the answers are no, the properties probably are not similar. File free taxes Example. File free taxes Your beach cottage was available for rent from June 1 through August 31 (92 days). File free taxes Except for the first week in August (7 days), when you were unable to find a renter, you rented the cottage at a fair rental price during that time. File free taxes The person who rented the cottage for July allowed you to use it over the weekend (2 days) without any reduction in or refund of rent. File free taxes Your family also used the cottage during the last 2 weeks of May (14 days). File free taxes The cottage was not used at all before May 17 or after August 31. File free taxes You figure the part of the cottage expenses to treat as rental expenses as follows. File free taxes The cottage was used for rental a total of 85 days (92 − 7). File free taxes The days it was available for rent but not rented (7 days) are not days of rental use. File free taxes The July weekend (2 days) you used it is rental use because you received a fair rental price for the weekend. File free taxes You used the cottage for personal purposes for 14 days (the last 2 weeks in May). File free taxes The total use of the cottage was 99 days (14 days personal use + 85 days rental use). File free taxes Your rental expenses are 85/99 (86%) of the cottage expenses. File free taxes Note. File free taxes When determining whether you used the cottage as a home, the July weekend (2 days) you used it is considered personal use even though you received a fair rental price for the weekend. File free taxes Therefore, you had 16 days of personal use and 83 days of rental use for this purpose. File free taxes Because you used the cottage for personal purposes more than 14 days and more than 10% of the days of rental use (8 days), you used it as a home. File free taxes If you have a net loss, you may not be able to deduct all of the rental expenses. File free taxes See Dwelling Unit Used as a Home, next. File free taxes Dwelling Unit Used as a Home If you use a dwelling unit for both rental and personal purposes, the tax treatment of the rental expenses you figured earlier under Dividing Expenses and rental income depends on whether you are considered to be using the dwelling unit as a home. File free taxes You use a dwelling unit as a home during the tax year if you use it for personal purposes more than the greater of: 14 days, or 10% of the total days it is rented to others at a fair rental price. File free taxes See What is a day of personal use , later. File free taxes If a dwelling unit is used for personal purposes on a day it is rented at a fair rental price (discussed earlier), do not count that day as a day of rental use in applying (2) above. File free taxes Instead, count it as a day of personal use in applying both (1) and (2) above. File free taxes What is a day of personal use?   A day of personal use of a dwelling unit is any day that the unit is used by any of the following persons. File free taxes You or any other person who owns an interest in it, unless you rent it to another owner as his or her main home under a shared equity financing agreement (defined later). File free taxes However, see Days used as a main home before or after renting , later. File free taxes A member of your family or a member of the family of any other person who owns an interest in it, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. File free taxes Family includes only your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc. File free taxes ), and lineal descendants (children, grandchildren, etc. File free taxes ). File free taxes Anyone under an arrangement that lets you use some other dwelling unit. File free taxes Anyone at less than a fair rental price. File free taxes Main home. File free taxes   If the other person or member of the family in (1) or (2) above has more than one home, his or her main home is ordinarily the one he or she lived in most of the time. File free taxes Shared equity financing agreement. File free taxes   This is an agreement under which two or more persons acquire undivided interests for more than 50 years in an entire dwelling unit, including the land, and one or more of the co-owners is entitled to occupy the unit as his or her main home upon payment of rent to the other co-owner or owners. File free taxes Donation of use of the property. File free taxes   You use a dwelling unit for personal purposes if: You donate the use of the unit to a charitable organization, The organization sells the use of the unit at a fund-raising event, and The “purchaser” uses the unit. File free taxes Examples. File free taxes   The following examples show how to determine if you have days of personal use. File free taxes Example 1. File free taxes You and your neighbor are co-owners of a condominium at the beach. File free taxes Last year, you rented the unit to vacationers whenever possible. File free taxes The unit was not used as a main home by anyone. File free taxes Your neighbor used the unit for 2 weeks last year; you did not use it at all. File free taxes Because your neighbor has an interest in the unit, both of you are considered to have used the unit for personal purposes during those 2 weeks. File free taxes Example 2. File free taxes You and your neighbors are co-owners of a house under a shared equity financing agreement. File free taxes Your neighbors live in the house and pay you a fair rental price. File free taxes Even though your neighbors have an interest in the house, the days your neighbors live there are not counted as days of personal use by you. File free taxes This is because your neighbors rent the house as their main home under a shared equity financing agreement. File free taxes Example 3. File free taxes You own a rental property that you rent to your son. File free taxes Your son does not own any interest in this property. File free taxes He uses it as his main home and pays you a fair rental price. File free taxes Your son's use of the property is not personal use by you because your son is using it as his main home, he owns no interest in the property, and he is paying you a fair rental price. File free taxes Example 4. File free taxes You rent your beach house to Rosa. File free taxes Rosa rents her cabin in the mountains to you. File free taxes You each pay a fair rental price. File free taxes You are using your beach house for personal purposes on the days that Rosa uses it because your house is used by Rosa under an arrangement that allows you to use her cabin. File free taxes Example 5. File free taxes You rent an apartment to your mother at less than a fair rental price. File free taxes You are using the apartment for personal purposes on the days that your mother rents it because you rent it for less than a fair rental price. File free taxes Days used for repairs and maintenance. File free taxes   Any day that you spend working substantially full time repairing and maintaining (not improving) your property is not counted as a day of personal use. File free taxes Do not count such a day as a day of personal use even if family members use the property for recreational purposes on the same day. File free taxes Example. File free taxes Corey owns a cabin in the mountains that he rents for most of the year. File free taxes He spends a week at the cabin with family members. File free taxes Corey works on maintenance of the cabin 3 or 4 hours each day during the week and spends the rest of the time fishing, hiking, and relaxing. File free taxes Corey's family members, however, work substantially full time on the cabin each day during the week. File free taxes The main purpose of being at the cabin that week is to do maintenance work. File free taxes Therefore, the use of the cabin during the week by Corey and his family will not be considered personal use by Corey. File free taxes Days used as a main home before or after renting. File free taxes   For purposes of determining whether a dwelling unit was used as a home, you may not have to count days you used the property as your main home before or after renting it or offering it for rent as days of personal use. File free taxes Do not count them as days of personal use if: You rented or tried to rent the property for 12 or more consecutive months. File free taxes You rented or tried to rent the property for a period of less than 12 consecutive months and the period ended because you sold or exchanged the property. File free taxes However, this special rule does not apply when dividing expenses between rental and personal use. File free taxes See Property Changed to Rental Use in chapter 4. File free taxes Example 1. File free taxes On February 29, 2012, you moved out of the house you had lived in for 6 years because you accepted a job in another town. File free taxes You rented your house at a fair rental price from March 15, 2012, to May 14, 2013 (14 months). File free taxes On June 1, 2013, you moved back into your old house. File free taxes The days you used the house as your main home from January 1 to February 29, 2012, and from June 1 to December 31, 2013, are not counted as days of personal use. File free taxes Therefore, you would use the rules in chapter 1 when figuring your rental income and expenses. File free taxes Example 2. File free taxes On January 31, you moved out of the condominium where you had lived for 3 years. File free taxes You offered it for rent at a fair rental price beginning on February 1. File free taxes You were unable to rent it until April. File free taxes On September 15, you sold the condominium. File free taxes The days you used the condominium as your main home from January 1 to January 31 are not counted as days of personal use when determining whether you used it as a home. File free taxes Examples. File free taxes   The following examples show how to determine whether you used your rental property as a home. File free taxes Example 1. File free taxes You converted the basement of your home into an apartment with a bedroom, a bathroom, and a small kitchen. File free taxes You rented the basement apartment at a fair rental price to college students during the regular school year. File free taxes You rented to them on a 9-month lease (273 days). File free taxes You figured 10% of the total days rented to others at a fair rental price is 27 days. File free taxes During June (30 days), your brothers stayed with you and lived in the basement apartment rent free. File free taxes Your basement apartment was used as a home because you used it for personal purposes for 30 days. File free taxes Rent-free use by your brothers is considered personal use. File free taxes Your personal use (30 days) is more than the greater of 14 days or 10% of the total days it was rented (27 days). File free taxes Example 2. File free taxes You rented the guest bedroom in your home at a fair rental price during the local college's homecoming, commencement, and football weekends (a total of 27 days). File free taxes Your sister-in-law stayed in the room, rent free, for the last 3 weeks (21 days) in July. File free taxes You figured 10% of the total days rented to others at a fair rental price is 3 days. File free taxes The room was used as a home because you used it for personal purposes for 21 days. File free taxes That is more than the greater of 14 days or 10% of the 27 days it was rented (3 days). File free taxes Example 3. File free taxes You own a condominium apartment in a resort area. File free taxes You rented it at a fair rental price for a total of 170 days during the year. File free taxes For 12 of these days, the tenant was not able to use the apartment and allowed you to use it even though you did not refund any of the rent. File free taxes Your family actually used the apartment for 10 of those days. File free taxes Therefore, the apartment is treated as having been rented for 160 (170 – 10) days. File free taxes You figured 10% of the total days rented to others at a fair rental price is 16 days. File free taxes Your family also used the apartment for 7 other days during the year. File free taxes You used the apartment as a home because you used it for personal purposes for 17 days. File free taxes That is more than the greater of 14 days or 10% of the 160 days it was rented (16 days). File free taxes Minimal rental use. File free taxes   If you use the dwelling unit as a home and you rent it less than 15 days during the year, that period is not treated as rental activity. File free taxes See Used as a home but rented less than 15 days, later, for more information. File free taxes Limit on deductions. File free taxes   Renting a dwelling unit that is considered a home is not a passive activity. File free taxes Instead, if your rental expenses are more than your rental income, some or all of the excess expenses cannot be used to offset income from other sources. File free taxes The excess expenses that cannot be used to offset income from other sources are carried forward to the next year and treated as rental expenses for the same property. File free taxes Any expenses carried forward to the next year will be subject to any limits that apply for that year. File free taxes This limitation will apply to expenses carried forward to another year even if you do not use the property as your home for that subsequent year. File free taxes   To figure your deductible rental expenses for this year and any carryover to next year, use Worksheet 5–1. File free taxes Reporting Income and Deductions Property not used for personal purposes. File free taxes   If you do not use a dwelling unit for personal purposes, see chapter 3 for how to report your rental income and expenses. File free taxes Property used for personal purposes. File free taxes   If you do use a dwelling unit for personal purposes, then how you report your rental income and expenses depends on whether you used the dwelling unit as a home. File free taxes Not used as a home. File free taxes   If you use a dwelling unit for personal purposes, but not as a home, report all the rental income in your income. File free taxes Since you used the dwelling unit for personal purposes, you must divide your expenses between the rental use and the personal use as described earlier in this chapter under Dividing Expenses . File free taxes The expenses for personal use are not deductible as rental expenses. File free taxes   Your deductible rental expenses can be more than your gross rental income; however, see Limits on Rental Losses in chapter 3. File free taxes Used as a home but rented less than 15 days. File free taxes   If you use a dwelling unit as a home and you rent it less than 15 days during the year, its primary function is not considered to be rental and it should not be reported on Schedule E (Form 1040). File free taxes You are not required to report the rental income and rental expenses from this activity. File free taxes The expenses, including qualified mortgage interest, property taxes, and any qualified casualty loss will be reported as normally allowed on Schedule A (Form 1040). File free taxes See the Instructions for Schedule A (Form 1040) for more information on deducting these expenses. File free taxes Used as a home and rented 15 days or more. File free taxes   If you use a dwelling unit as a home and rent it 15 days or more during the year, include all your rental income in your income. File free taxes Since you used the dwelling unit for personal purposes, you must divide your expenses between the rental use and the personal use as described earlier in this chapter under Dividing Expenses . File free taxes The expenses for personal use are not deductible as rental expenses. File free taxes   If you had a net profit from renting the dwelling unit for the year (that is, if your rental income is more than the total of your rental expenses, including depreciation), deduct all of your rental expenses. File free taxes You do not need to use Worksheet 5-1. File free taxes   However, if you had a net loss from renting the dwelling unit for the year, your deduction for certain rental expenses is limited. File free taxes To figure your deductible rental expenses and any carryover to next year, use Worksheet 5–1. File free taxes Worksheet 5-1. File free taxes Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Use this worksheet only if you answer “yes” to all of the following questions. File free taxes Did you use the dwelling unit as a home this year? (See Dwelling Unit Used as a Home . File free taxes ) Did you rent the dwelling unit at a fair rental price 15 days or more this year? Is the total of your rental expenses and depreciation more than your rental income? PART I. File free taxes Rental Use Percentage A. File free taxes Total days available for rent at fair rental price A. File free taxes       B. File free taxes Total days available for rent (line A) but not rented B. File free taxes       C. File free taxes Total days of rental use. File free taxes Subtract line B from line A C. File free taxes       D. File free taxes Total days of personal use (including days rented at less than fair rental price) D. File free taxes       E. File free taxes Total days of rental and personal use. File free taxes Add lines C and D E. File free taxes       F. File free taxes Percentage of expenses allowed for rental. File free taxes Divide line C by line E     F. File free taxes . File free taxes PART II. File free taxes Allowable Rental Expenses 1. File free taxes Enter rents received 1. File free taxes   2a. File free taxes Enter the rental portion of deductible home mortgage interest and qualified mortgage insurance premiums (see instructions) 2a. File free taxes       b. File free taxes Enter the rental portion of real estate taxes b. File free taxes       c. File free taxes Enter the rental portion of deductible casualty and theft losses (see instructions) c. File free taxes       d. File free taxes Enter direct rental expenses (see instructions) d. File free taxes       e. File free taxes Fully deductible rental expenses. File free taxes Add lines 2a–2d. File free taxes Enter here and  on the appropriate lines on Schedule E (see instructions) 2e. File free taxes   3. File free taxes Subtract line 2e from line 1. File free taxes If zero or less, enter -0- 3. File free taxes   4a. File free taxes Enter the rental portion of expenses directly related to operating or maintaining  the dwelling unit (such as repairs, insurance, and utilities) 4a. File free taxes       b. File free taxes Enter the rental portion of excess mortgage interest and qualified mortgage insurance premiums (see instructions) b. File free taxes       c. File free taxes Carryover of operating expenses from 2012 worksheet c. File free taxes       d. File free taxes Add lines 4a–4c d. File free taxes       e. File free taxes Allowable expenses. File free taxes Enter the smaller of line 3 or line 4d (see instructions) 4e. File free taxes   5. File free taxes Subtract line 4e from line 3. File free taxes If zero or less, enter -0- 5. File free taxes   6a. File free taxes Enter the rental portion of excess casualty and theft losses (see instructions) 6a. File free taxes       b. File free taxes Enter the rental portion of depreciation of the dwelling unit b. File free taxes       c. File free taxes Carryover of excess casualty losses and depreciation from 2012 worksheet c. File free taxes       d. File free taxes Add lines 6a–6c d. File free taxes       e. File free taxes Allowable excess casualty and theft losses and depreciation. File free taxes Enter the smaller of  line 5 or line 6d (see instructions) 6e. File free taxes   PART III. File free taxes Carryover of Unallowed Expenses to Next Year 7a. File free taxes Operating expenses to be carried over to next year. File free taxes Subtract line 4e from line 4d 7a. File free taxes   b. File free taxes Excess casualty and theft losses and depreciation to be carried over to next year. File free taxes  Subtract line 6e from line 6d b. File free taxes   Worksheet 5-1 Instructions. File free taxes Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Caution. File free taxes Use the percentage determined in Part I, line F, to figure the rental portions to enter on lines 2a–2c, 4a–4b, and 6a–6b of  Part II. File free taxes Line 2a. File free taxes Figure the mortgage interest on the dwelling unit that you could deduct on Schedule A as if you had not rented the unit. File free taxes Do not include interest on a loan that did not benefit the dwelling unit. File free taxes For example, do not include interest on a home equity loan used to pay off credit cards or other personal loans, buy a car, or pay college tuition. File free taxes Include interest on a loan used to buy, build, or improve the dwelling unit, or to refinance such a loan. File free taxes Include the rental portion of this interest in the total you enter on line 2a of the worksheet. File free taxes   Figure the qualified mortgage insurance premiums on the dwelling unit that you could deduct on line 13 of Schedule A as if you had not rented the unit. File free taxes See the Schedule A instructions. File free taxes However, figure your adjusted gross income (Form 1040, line 38) without your rental income and expenses from the dwelling unit. File free taxes See Line 4b to deduct the part of the qualified mortgage insurance premiums not allowed because of the adjusted gross income limit. File free taxes Include the rental portion of the amount from Schedule A, line 13, in the total you enter on line 2a of the worksheet. File free taxes   Note. File free taxes Do not file this Schedule A or use it to figure the amount to deduct on line 13 of that schedule. File free taxes Instead, figure the personal portion on a separate Schedule A. File free taxes If you have deducted mortgage interest or qualified mortgage insurance premiums on the dwelling unit on other forms, such as Schedule C or F, remember to reduce your Schedule A deduction by that amount. File free taxes           Line 2c. File free taxes Figure the casualty and theft losses related to the dwelling unit that you could deduct on Schedule A as if you had not rented the dwelling unit. File free taxes To do this, complete Section A of Form 4684, Casualties and Thefts, treating the losses as personal losses. File free taxes If any of the loss is due to a federally declared disaster, see the Instructions for Form 4684. File free taxes On Form 4684, line 17, enter 10% of your adjusted gross income figured without your rental income and expenses from the dwelling unit. File free taxes Enter the rental portion of the result from Form 4684, line 18, on line 2c of this worksheet. File free taxes   Note. File free taxes Do not file this Form 4684 or use it to figure your personal losses on Schedule A. File free taxes Instead, figure the personal portion on a separate Form 4684. File free taxes           Line 2d. File free taxes Enter the total of your rental expenses that are directly related only to the rental activity. File free taxes These include interest on loans used for rental activities other than to buy, build, or improve the dwelling unit. File free taxes Also include rental agency fees, advertising, office supplies, and depreciation on office equipment used in your rental activity. File free taxes           Line 2e. File free taxes You can deduct the amounts on lines 2a, 2b, 2c, and 2d as rental expenses on Schedule E even if your rental expenses are more than your rental income. File free taxes Enter the amounts on lines 2a, 2b, 2c, and 2d on the appropriate lines of Schedule E. File free taxes           Line 4b. File free taxes On line 2a, you entered the rental portion of the mortgage interest or qualified mortgage insurance premiums you could deduct on Schedule A if you had not rented the dwelling unit. File free taxes If you had additional mortgage interest and qualified mortgage insurance premiums that would not be deductible on Schedule A because of limits imposed on them, enter on line 4b of this worksheet the rental portion of those excess amounts. File free taxes Do not include interest on a loan that did not benefit the dwelling unit  (as explained in the line 2a instructions). File free taxes           Line 4e. File free taxes You can deduct the amounts on lines 4a, 4b, and 4c as rental expenses on Schedule E only to the extent they are not more than the amount on line 4e. File free taxes *           Line 6a. File free taxes To find the rental portion of excess casualty and theft losses, use the Form 4684 you prepared for line 2c of this worksheet. File free taxes   A. File free taxes Enter the amount from Form 4684, line 10       B. File free taxes Enter the rental portion of line A       C. File free taxes Enter the amount from line 2c of this worksheet       D. File free taxes Subtract line C from line B. File free taxes Enter the result here and on line 6a of this worksheet               Line 6e. File free taxes You can deduct the amounts on lines 6a, 6b, and 6c as rental expenses on Schedule E only to the extent they are not more than the amount on line 6e. File free taxes * *Allocating the limited deduction. File free taxes If you cannot deduct all of the amount on line 4d or 6d this year, you can allocate the allowable deduction in any way you wish among the expenses included on line 4d or 6d. File free taxes Enter the amount you allocate to each expense on the appropriate line of Schedule E, Part I. File free taxes Prev  Up  Next   Home   More Online Publications