1040 educator expenses

1040 educator expenses

Enter the student's name as shown on page 1 of your tax return.

Line 2 - Student Social Security Number

Enter the student's taxpayer identification number as shown on page 1 of your tax return.

Line 3 - Educational Institution Information

If the student attended only one educational institution, enter the information about the institution and answer the questions about Form 1098-T in section 3(i). If the student attended a second educational institution, enter the information and answers for the second educational institution in section 3(ii).

If the educational institution has a foreign address, enter the foreign address here and do not abbreviate the country name. Follow the country's practice for entering the postal code and name of the province, country or state.

If the American opportunity credit has been claimed for this student for any 4 tax years before 2014 (including any year for which the Hope scholarship credit was claimed for the student), the American opportunity credit cannot be claimed for this student for 2014. Check “Yes” and go to line 8.

If the American opportunity and Hope scholarship credits have been claimed for this student for 3 or fewer prior tax years, check “No.” See Student qualifications, earlier.

Check “Yes” if the student enrolled at least half-time for at least one academic period that began (or is treated as having begun) in 2014 at an eligible educational institution in a program leading towards a postsecondary degree, certificate, or other recognized postsecondary educational credential. Otherwise, check “No.”

If any qualified education expenses for the student were paid in 2014 for an academic period beginning in the first 3 months of 2015, treat that academic period as if it began in 2014. See Student qualifications and Prepaid Expenses, earlier.

If you checked “Yes” go to line 6. If you checked “No” the student is not eligible for the American opportunity credit, skip lines 6 through 8 and go to line 9.

Check “Yes” if the student completed the first 4 years of postsecondary education before 2014. Otherwise, check “No.”

If you checked “No,” go to line 7. If you checked “Yes,” the student is not eligible for the American opportunity credit; skip lines 7 and 8 and go to line 9.

Check “Yes” if the student was convicted, before the end of 2014, of a federal or state felony for possession or distribution of a controlled substance.

If you checked “No,” complete either line 8 or line 9 for this student. If you checked “Yes,” the student is not eligible for the American opportunity credit; skip line 8 and go to line 9.

TIP: You cannot take the American opportunity credit and the lifetime learning credit for the same student in the same year. If you complete line 8 for this student, do not complete line 9.

Enter the student's adjusted qualified education expenses for line 8. See Qualified Education Expenses. Use the Adjusted Qualified Education Expenses Worksheet to figure each student's adjusted qualified education expenses. Do not enter more than $4,000.

Enter the student's adjusted qualified education expenses for line 9. See Qualified Education Expenses. Use the Adjusted Qualified Education Expenses Worksheet to figure each student's adjusted qualified education expenses.

education expenses. Do not enter more than $4,000.

Earned income includes wages, salaries, professional fees, and other payments received for personal services actually performed. Earned income includes the part of any scholarship or fellowship that represents payment for teaching, research, or other services performed by the student that are required as a condition for receiving the scholarship or fellowship. Earned income does not include that part of the compensation for personal services rendered to a corporation which represents a distribution of earnings or profits rather than a reasonable allowance as compensation for the personal services actually rendered.

If you are a sole proprietor or a partner in a trade or business in which both personal services and capital are material income-producing factors, earned income also includes a reasonable allowance for compensation for personal services, but not more than 30% of your share of the net profits from that trade or business (after subtracting the deduction for one-half of self-employment tax). However, if capital is not an income-producing factor and your personal services produced the business income, the 30% limit does not apply.

Your support includes food, shelter, clothing, medical and dental care, education and the like. Generally, the amount of an item of support will be the amount of expenses incurred by the one furnishing such item. If the item of support is in the form of property or lodging, measure the amount of such item of support by its fair market value. To figure your support, count support provided by you, your parents, and others. However, a scholarship received by you is not considered support if you were a full-time student (defined below) for 2014.

Solely for purposes of determining whether a scholarship is considered support, you were a full-time student for 2014 if during any part of any 5 calendar months during the year you were enrolled as a full-time student at an eligible educational institution (defined earlier), or took a full-time, on-farm training course given by such an institution or by a state, county, or local government agency.

Generally, qualified education expenses are amounts paid in 2014 for tuition and fees required for the student's enrollment or attendance at an eligible educational institution. It does not matter whether the expenses were paid in cash, by check, by credit or debit card, or with borrowed funds.

For course-related books, supplies, and equipment only certain expenses qualify.

  • American opportunity credit: Qualified education expenses include amounts spent on books, supplies, and equipment needed for a course of study, whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance.

  • Lifetime learning credit: Qualified education expenses include amounts for books, supplies, and equipment only if required to be paid to the institution as a condition of enrollment or attendance.
  • Qualified education expenses include nonacademic fees, such as student activity fees, athletic fees, or other expenses unrelated to the academic course of instruction, only if the fee must be paid to the institution as a condition of enrollment or attendance. However, fees for personal expenses (described below) are never qualified education expenses.

    Qualified education expenses do not include amounts paid for:

    • Personal expenses. This means room and board, insurance, medical expenses (including student health fees), transportation, and other similar personal, living, or family expenses.

  • Any course or other education involving sports, games, or hobbies, or any noncredit course, unless such course or other education is part of the student's degree program or (for the lifetime learning credit only) helps the student acquire or improve job skills.
  • You should receive Form 1098-T, Tuition Statement, from the institution reporting either payments received in 2014 (box 1) or amounts billed in 2014 (box 2). However, the amount in box 1 or 2 of Form 1098-T may be different from the amount you paid (or are treated as having paid). In completing Form 8863, use only the amounts you actually paid (plus any amounts you are treated as having paid) in 2014 (reduced, as necessary, as described in Adjusted Qualified Education Expenses, later). See chapters 2 and 3 of Pub. 970 for more information on Form 1098-T.

    Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. Qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you.

    If you or the student takes a deduction for higher education expenses, such as on Schedule A or Schedule C (Form 1040), you cannot use those same expenses in your qualified education expenses when figuring your education credits.

    CAUTION. Any qualified expenses used to figure the education credits cannot be taken into account in determining the amount of a distribution from a Coverdell ESA or a qualified tuition program (section 529 plan) that is excluded from gross income. See Pub. 970, chapters 6 and 7, for more information.

    Adjusted Qualified Education Expenses Worksheet

    Complete a separate worksheet for each student for each academic period beginning (or treated as beginning) in 2014 for which you paid (or are treated as having paid) qualified education expenses in 2014.

    1. Total qualified education expenses paid for or on behalf of the student in 2014 for the academic period ____________
    2. Less adjustments:
      1. Tax-free educational assistance received in 2014 allocable to the academic period ____________
      2. Tax-free educational assistance received in 2015 (and before you file your 2014 tax return) allocable to the academic period ____________
      3. Refunds of qualified education expenses paid in 2014 if the refund is received in 2014 or in 2015 before you file your 2014 tax return ____________
    3. Total adjustments (add lines 2a, 2b, and 2c) ____________
    4. Adjusted qualified education expenses. Subtract line 3 from line 1. If zero or less, enter -0- ____________

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