Wednesday, September 17, 2014

Education Credits: Understanding your 1098-T


Education credits: Understand your Form 1098-T

If you’re a college student or parent of a college student, you may be eligible for an education credit. Most students receive a Form 1098-T, Tuition Statement, from their educational institution. Form 1098-T contains helpful instructions and other information you’ll need to claim education credits on your federal tax form. These credits help offset your out-of-pocket expenses for tuition and fees, books and equipment.

Your educational institution is required to file a Form 1098-T with the IRS and provide you a copy when there is a reportable transaction. A reportable transaction includes payments received, amounts billed or refunds made for tuition and related expenses. The form should also give you other information for the educational institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements, or refunds, and whether you were enrolled at least half time or were a graduate student.

In most cases, you should receive Form 1098-T from the eligible educational institution by Jan. 31. If you don’t receive it by the end of January, be sure to contact your school.

Education Credits

An education credit helps with the cost of higher education by reducing the amount of tax owed on your tax return. If the credit reduces your tax to less than zero, you may get a refund. There are two education credits available: the American Opportunity Tax Credit and the Lifetime Learning Credit. To claim an education credit, you must file Form 1040 or 1040A with Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits). See Instructions for Student on Page 4 of Form 1098-T for more details.

To see if you qualify for a credit, and for help in calculating the amount of your credit, see Pub. 970, Tax Benefits for Education; Form 8863, Education Credits; and the Form 1040 or 1040A instructions. You can also use the IRS’s Interactive Tax Assistant tool to help determine if you are eligible for these benefits.

Don’t overlook these important credits. Find out more about education credits by visiting the Education Credits Web page on

Monday, July 7, 2014

Earned Income Tax Credit

What Is the EIC?

The Earned Income Credit (EIC) is a refundable tax credit for certain workers.

Who May Claim the EIC?

You may be able to claim the EIC for 2013 if you worked and all  four of the following conditions apply.

1. You (and your spouse, if ling a joint return) have a valid social security number (SSN) issued by the Social Security Administration. For more information on valid SSNs, see Pub. 596, Earned Income Credit (EIC).

2. Your 2013 earned income and adjusted gross income are both under $37,870 ($43,210 if married ling jointly) if you have one qualifying child; under $43,038 ($48,378 if married ling jointly) if you have two qualifying children; under $46,227 ($51,567 if married ling jointly) if you have three or more qualifying children; or under $14,340 ($19,680 if married ling jointly) if you do not have a qualifying child. For a definition of earned income, see the 2013 instructions for Form 1040, 1040A, or 1040EZ.

3. Your ling status on your 2013 tax return is any status except married ling a separate return.

4. You were not a qualifying child of another taxpayer in 2013. If you do not have a qualifying child, you must also meet these conditions. 

a. You, or your spouse if ling a joint return, were at least age 25 but under age 65 at the end of 2013. (You meet this condition if you, or your spouse if ling a joint return, were born after December 31, 1948, and before January 2, 1989.) If your spouse died in 2013, see Pub. 596.

b. You cannot be claimed as a dependent on someone else’s 2013 tax return.

c. Your home, and your spouse’s if ling a joint return, was in the United States for over half of 2013. If you are in the military on extended active duty outside the United States, your home is considered to be in the United States during that duty period and you may be able to claim the EIC.

You cannot claim the EIC if any of the following conditions apply. 

1. Your 2013 investment income (such as interest and dividends) is over $3,300. See Pub. 596 for more information.

2. You le either Form 2555 or Form 2555-EZ (relating to foreign earned income).

3. You were a nonresident alien for any part of 2013 unless you were married to a U.S. citizen or resident and elected to be taxed as a resident alien for the entire year. See Pub. 519, U.S. Tax Guide for Aliens, for more information.

Who Is a Qualifying Child?

Any child who meets all four of the following conditions is a qualifying child.

1. The child is your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild, niece, or nephew). An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

2. At the end of 2013, the child was under age 19 and younger than you (or your spouse, if ling jointly); or under age 24, a student, and younger than you (or your spouse, if ling jointly); or any age and permanently and totally disabled.

3. The child lived with you in the United States for over half of 2013. If the child did not live with you for the required time, there are exceptions if the child was born or died during the year, the child is presumed to have been kidnapped by someone who is not a family member, or there was a temporary absence.

4. The child does not le a joint income tax return for 2013. There are additional rules if a child is married or is the qualifying child of more than one person. For details, see the 2013 instructions for Form 1040, 1040A, or 1040EZ.

How Do You Claim the EIC?

If you are eligible, claim the EIC on your 2013 income tax return. If you have a qualifying child, you must also fill in Schedule EIC and attach it to your Form 1040 or Form 1040A. If eligible, you can claim the EIC to get a refund even if you have no tax withheld from your pay or owe no tax. For example, if you had no tax withheld in 2013 and owe no tax but are eligible for a credit of $800, you must le a 2013 income tax return to get the $800 refund.

More Information

This notice provides the basic requirements to qualify for the EIC. Refer to the instructions for Form 1040, 1040A, or 1040EZ; Pub. 596; or for details. You can get IRS forms and publications at or by calling 1-800-TAX-FORM (1-800-829-3676).

Notice 797 (Rev. 12-2013)

Thursday, March 13, 2014

Self- Assisted Tax Preparation

The South Hampton Roads Earned Income Tax Credit Coalition empowers working individuals and families with low-to-moderate income access free tax preparation and filing services online, at home, at a community center or with the help of a nonprofit partner. See for locations and to schedule an appointment.

Not sure you can do your taxes yourself? At The Up Center, Norfolk, Virginia, we can do your taxes or provide whatever level of assistance you might need to do and file your taxes at  Through the MyFreeTaxes Partnership, we provide easy, safe, secure and 100 percent free federal and state tax preparation and filing assistance for qualified individuals.
Sponsored by the Walmart Foundation, in cooperation with Goodwill Industries International, National Disability Institute, and United Way Worldwide, the partnership’s online and in-person tax preparation and filing services have helped millions of families claim nearly $8 billion in tax credits and refunds since 2009. Tax filing software is provided through and powered by H&R Block.

Carla Skinner of Norfolk, Virginia, came to The Up Center recently for tax assistance. She states, “Preparing my taxes with a tax professional next to me gave me confidence that I would get the tax credits that I was due and that my return would be accurate  … it was an enjoyable experience”.

Wednesday, February 12, 2014