Filing Requirements

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• Filing Requirements

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Objectives

• Determine who must file
• Determine who should file
• Select the appropriate tax form to use

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Who Must File?

• Charts are provided to help you determine who
  must file

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Who Should File?

• Taxpayers who fall below the filing requirements
  should file
• to claim a refund of withheld taxes
• to claim an Earned Income Credit
• to claim the Additional Child Tax Credit
• To claim a credit for federal telephone excise
  tax paid

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Which Form Should You Use?

• Simplest form that will accommodate the
  taxpayers income and expenses
• 1040EZ
• 1040A
• 1040

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• Education Credits

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Objectives

• Determine who is eligible to claim the credit
• Determine which credit should be claimed
• Determine what effect the GOZ Act of 2005 had on
  these credits

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General Requirements

• The taxpayer can not file Married Filing Separate
  
• Have qualified expenses
• Have an eligible student
• Eligible student must attend eligible institution
• Phase Out
• 90,000-110,000 Married Filing Joint (MFJ)
• 45,000-55,000 Others

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Hope Credit

• Can be claimed for each eligible student
• Maximum is 1,650 credit per student (3,300 for
  GOZ Student)
• Applies to the first two taxable years of
  postsecondary education
• Calculated in Part I of Form 8863
• Can be claimed on Form 1040A or Form 1040

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Lifetime Learning Credit

• Based on the total of qualified expenses, not the
  number of eligible students
• The maximum credit is 4,000 (for GOZ Students)
  or 2,000 per year for regular students
• The credit is figured in Part II of Form 8863
• The credit can be claimed on Form 1040A or Form
  1040

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Lesson Summary

• A taxpayer cannot
• Deduct higher education expenses and also claim a
  Hope or Lifetime Learning Credit based on the
  same expenses,
• Claim a Hope Credit and a Lifetime Learning
  Credit based on the same qualified education
  expenses, or
• Claim a credit based on expenses paid with
  tax-free scholarship, grant, or employer-provided
  educational assistance.

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• Tuition and Fee Deduction

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Tuition and Fee Deduction

• Tuition and related expenses can now be taken as
  an adjustment to income
• The maximum deduction for 2006 is 4,000
• AGI limits apply
• Not available to Married Filing Separate
  taxpayers
• No Double Benefit Allowed

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Tuition and Fee Deduction

• To claim the Tuition and Fees Deduction
• the taxpayer must
• Have incurred qualified expenses
• For an eligible student
• To attend an eligible educational institution

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• Student Loan Interest
• Deduction

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Student Loan Interest

• The maximum deduction for 2006 is 2,500
• If taxpayer paid 600 or more should receive a
  statement from lender
• AGI limits apply

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• Telephone Excise Tax Refund
• (TETR)

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What Is the Telephone Excise Tax Refund?

• A one-time refund available to any telephone
  customer who has paid tax on a long-distance
  service after Feb. 28, 2003, and before Aug. 1,
  2006.

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Who is Eligible?

• In general, any individual, business or
  nonprofit organization that paid federal
  long-distance excise tax on telephone service
  billed after Feb. 28, 2003, and before Aug. 1,
  2006, is eligible to request the refund.

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How Do You Get the Refund?

• If you are not normally required to file an
  income tax return, use Form 1040EZ-T to request a
  standard refund amount.
• 2) Request a refund of the actual amount of taxes
  paid after Feb. 28, 2003, and before Aug. 1,
  2006, using Form 1040EZ-T and Form 8913.
• 3) If you are filing a regular 2006 income tax
  return, fill out an additional line item located
  on that form.

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How Much Is the Refund?

• A standard refund amount ranging from 30 to 60,
  based on exemptions, can be requested through
  Form 1040EZ-T.
• Or, a refund equivalent to the actual amount of
  taxes paid can be requested by reviewing all
  phone bills after
• Feb. 28, 2003, and before Aug. 1, 2006.

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• Earned Income Tax Credit
• (EITC)

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Who Can Claim The EICGeneral Eligibility Rules

• Earned income and adjusted gross income limited
• Have valid SSN
• No Married Filing Separate (MFS) filing status
• A US citizen or resident alien
• Not file Form 2555 or 2555-EZ
• Investment income limitation

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Who Can Claim The EICGeneral Requirements -
continued

• Have earned income
• Cannot be qualifying child of another person

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