If you were an eligible educator in 2007, you can deduct on line 23 up to $250 of qualified expenses you paid in 2007. If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. However, neither spouse can deduct more than $250 of his or her qualified expenses on line 23. You may be able to deduct expenses that are more than the $250 (or $500) limit on Schedule A, line 21. An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide who worked in a school for at least 900 hours during a school year.
Qualified expenses include ordinary and necessary expenses paid in connection with books, supplies, equipment (including computer equipment, software, and services), and other materials used in the classroom. An ordinary expense is one that is common and accepted in your educational field. A necessary expense is one that is helpful and appropriate for your profession as an educator. An expense does not have to be required to be considered necessary.
Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education.
You must reduce your qualified expenses by the following amounts.
- Excludable U.S. series EE and I savings bond interest from Form 8815.
- Nontaxable qualified tuition program earnings or distributions.
- Any nontaxable distribution of Coverdell education savings account earnings.
- Any reimbursements you received for these expenses that were not reported to you in box 1 of your Form W-2.
For more details, use TeleTax topic 458 (see page 79) or see Pub. 529.
Include the following deductions on
line 24.
- Certain business expenses of National Guard and reserve members who traveled more than 100 miles from home to perform services as a National Guard or reserve member.
- Performing-arts-related expenses as a qualified performing artist.
- Business expenses of fee-basis state or local government officials.
For more details, see Form 2106 or 2106-EZ.
You may be able to take this deduction if contributions (other than employer contributions, rollovers, and qualified HSA funding distributions from an IRA) were made to your HSA for 2007. See Form 8889.
If you moved in connection with your job or business or started a new job, you may be able to take this deduction. But your new workplace must be at least 50 miles farther from your old home than your old home was from your old workplace. If you had no former workplace, your new workplace must be at least 50 miles from your old home. Use TeleTax topic 455 (see page 79) or see Form 3903.
If you were self-employed and owe self-employment tax, fill in Schedule SE to figure the amount of your deduction.
If you were self-employed or a partner, you may be able to take this deduction. See
Pub. 560 or, if you were a minister, Pub. 517.
You may be able to deduct the amount you paid for health insurance for yourself, your spouse, and your dependents if any of the following applies.
- You were self-employed and had a net profit for the year.
- You used one of the optional methods to figure your net earnings from self-employment on Schedule SE.
- You received wages in 2007 from an S corporation in which you were a more-than-2% shareholder. Health insurance benefits paid for you may be shown in box 14 of Form W-2.
The insurance plan must be established under your business. But if you were also eligible to participate in any subsidized health plan maintained by your or your spouse's employer for any month or part of a month in 2007, amounts paid for health insurance coverage for that month cannot be used to figure the deduction. For example, if you were eligible to participate in a subsidized health plan maintained by your spouse's employer from September 30 through December 31, you cannot use amounts paid for health insurance coverage for September through December to figure your deduction. Also, amounts paid for health insurance coverage from retirement plan distributions that were nontaxable because you are a retired public safety officer cannot be used to figure the deduction.
taxmap/instr/i1040gi-011.htm#w24811v09
 |
Self-Employed Health Insurance Deduction Worksheet—Line 29 - If, during 2007, you were an eligible trade adjustment assistance (TAA) recipient, alternative TAA recipient, or Pension Benefit Guaranty Corporation pension recipient, see the Note on page 26.
- Be sure you have read the Exception on page 26 to see if you can use this worksheet instead of Pub. 535 to figure your deduction.
m | 1. | Enter the total amount paid in 2007 for health insurance coverage established under your business | | | | | | for 2007 for you, your spouse, and your dependents. But do not include amounts for any month you were eligible to participate in an employer-sponsored health plan or amounts paid from retirement plan distributions that were nontaxable because you are a retired public safety officer | 1. | | | | 2. | Enter your net profit* and any other earned income** from the business under which the insurance plan is established, minus any deductions on Form 1040, lines 27 and 28 | 2. | | | | 3. | Self-employed health insurance deduction. Enter the smaller of line 1 or line 2 here and on
Form 1040, line 29. Do not include this amount in figuring any medical expense deduction on Schedule A | 3. | | | | * If you used either optional method to figure your net earnings from self-employment, do not enter your net profit. Instead, enter the amount from Schedule SE, Section B, line 4b. | | | ** Earned income includes net earnings and gains from the sale, transfer, or licensing of property you created. However, it does not include capital gain income. If you were a more-than-2% shareholder in the S corporation under which the insurance plan is established, earned income is your Medicare wages (box 5 of Form W-2) from that corporation. | |
For more details, see Pub. 535.
taxmap/instr/i1040gi-011.htm#TXMP03fdb5f0
Note.(p28). If, during 2007, you were an eligible trade adjustment assistance (TAA) recipient, alternative TAA recipient, or Pension Benefit Guaranty Corporation pension recipient, you must complete Form 8885 before completing the worksheet on page 27. When figuring the amount to enter on line 1 of the worksheet on page 27, do not include: - Any amounts you included on Form 8885, line 4,
- Any qualified health insurance premiums you paid to
U.S. Treasury-HCTC,
or - Any health coverage tax credit advance payments shown in box 1 of Form 1099-H.
If you qualify to take the deduction, use the worksheet on page 27 to figure the amount you can deduct.
Use Pub. 535 instead of the worksheet on page 27 to figure your deduction if any of the following applies.
- You had more than one source of income subject to self-employment tax.
- You file Form 2555 or 2555-EZ.
- You are using amounts paid for qualified long-term care insurance to figure the deduction.
The Form 1099-INT or Form 1099-OID you received will show the amount of any penalty you were charged.
If you made payments to or for your spouse or former spouse under a divorce or separation instrument, you may be able to take this deduction. Use TeleTax topic 452 (see page 79) or see Pub. 504.
 | If you made any nondeductible contributions to a traditional individual retirement arrangement (IRA) for 2007, you must report them on Form 8606. |
If you made contributions to a traditional IRA for 2007, you may be able to take an IRA deduction. But you, or your spouse if filing a joint return, must have had earned income to do so. For IRA purposes, earned income includes alimony and separate maintenance payments reported on line 11. If you were a member of the U.S. Armed Forces, earned income includes any nontaxable combat pay you received. If you were self-employed, earned income is generally your net earnings from self-employment if your personal services were a material income-producing factor. For more details, see Pub. 590. A statement should be sent to you by May 31, 2008, that shows all contributions to your traditional IRA for 2007.
Use the worksheet on pages 28 and 29 to figure the amount, if any, of your IRA deduction. But read the following list before you fill in the worksheet.
- If you were age 70 or older at the end of 2007, you cannot deduct any contributions made to your traditional IRA for 2007 or treat them as nondeductible contributions.
- You cannot deduct contributions to a Roth IRA. But you may be able to take the retirement savings contributions credit (saver's credit). See the instructions for line 53 on page 41.
 | If you are filing a joint return and you or your spouse made contributions to both a traditional IRA and a Roth IRA for 2007, do not use the worksheet on pages 28 and 29. Instead, see Pub. 590 to figure the amount, if any, of your IRA deduction. |
- You cannot deduct elective deferrals to a 401(k) plan, section 457 plan, SIMPLE plan, or the federal Thrift Savings Plan. These amounts are not included as income in box 1 of your Form W-2. But you may be able to take the retirement savings contributions credit. See the instructions for line 53 on page 41.
- If you made contributions to your IRA in 2007 that you deducted for 2006, do not include them in the worksheet.
- If you received income from a nonqualified deferred compensation plan or nongovernmental section 457 plan that is included in box 1 of your Form W-2, or in box 7 of Form 1099-MISC, do not include that income on line 8 of the worksheet. The income should be shown in (a) box 11 of your Form W-2, (b) box 12 of your Form W-2 with code Z, or (c) box 15b of Form 1099-MISC. If it is not, contact your employer or the payer for the amount of the income.
- You must file a joint return to deduct contributions to your spouse's IRA. Enter the total IRA deduction for you and your spouse on line 32.
- Do not include qualified rollover contributions in figuring your deduction. Instead, see the instructions for lines 15a and 15b that begin on page 21.
- Do not include trustees' fees that were billed separately and paid by you for your IRA. These fees can be deducted only as an itemized deduction on Schedule A.
- Do not include any repayments of qualified reservist distributions. You cannot deduct them. For information on how to report these repayments, see in Pub. 590.
- If the total of your IRA deduction on line 32 plus any nondeductible contribution to your traditional IRAs shown on Form 8606 is less than your total traditional IRA contributions for 2007, see Pub. 590 for special rules.
- You may be able to deduct up to an additional $3,000 if all the following conditions are met.
- You must have been a participant in a 401(k) plan under which the employer matched at least 50% of your contributions to the plan with stock of the company.
- You must have been a participant in the 401(k) plan 6 months before the employer filed for bankruptcy.
- The employer (or a controlling corporation) must have been a debtor in a bankruptcy case in an earlier year.
- The employer (or any other person) must have been subject to indictment or conviction based on business transactions related to the bankruptcy.
If this applies to you, do not use the worksheet on pages 28 and 29. Instead, use the worksheet in Pub. 590.
| By April 1 of the year after the year in which you turn age 70, you must start taking minimum required distributions from your traditional IRA. If you do not, you may have to pay a 50% additional tax on the amount that should have been distributed. For details, including how to figure the minimum required distribution, see Pub. 590. |
If you were covered by a retirement plan (qualified pension, profit-sharing (including 401(k)), annuity, SEP, SIMPLE, etc.) at work or through self-employment, your IRA deduction may be reduced or eliminated. But you can still make contributions to an IRA even if you cannot deduct them. In any case, the income earned on your IRA contributions is not taxed until it is paid to you.
The Retirement plan
box in box 13 of your Form W-2 should be checked if you were covered by a plan at work even if you were not vested in the plan. You are also covered by a plan if you were self-employed and had a SEP, SIMPLE, or qualified retirement plan.
If you were covered by a retirement plan and you file Form 2555, 2555-EZ, or 8815, or you exclude employer-provided adoption benefits, see Pub. 590 to figure the amount, if any, of your IRA deduction.
If you were not covered by a retirement plan but your spouse was, you are considered covered by a plan unless you lived apart from your spouse for all of 2007.
| You may be able to take the retirement savings contributions credit. See the instructions for line 53 on page 41. |
taxmap/instr/i1040gi-011.htm#w24811v13
|
IRA Deduction Worksheet—Line 32 taxmap/instr/i1040gi-011.htm#TXMP563abb58
(p30). | If you were age 70 or older at the end of 2007, you cannot deduct any contributions made to your traditional IRA or treat them as nondeductible contributions. Do not complete this worksheet for anyone age 70 or older at the end of 2007. If you are married filing jointly and only one spouse was under age 70 at the end of 2007, complete this worksheet only for that spouse. |
- Be sure you have read the list on page 27. You may not be eligible to use this worksheet.
- Figure any write-in adjustments to be entered on the dotted line next to line 36 (see the instructions for line 36 on page 31).
| | Your IRA | Spouse's IRA | | | 1a. | | Were you covered by a retirement plan (see above)? | 1a. | |  Yes No | | | | nb. | | If married filing jointly, was your spouse covered by a retirement plan? | 1b. | | Yes No | | | | Next. If you checked "No" on line 1a (and "No" on line 1b if married filing jointly), skip lines 2 through 6, enter the applicable amount below on line 7a (and line 7b if applicable), and go to line 8. - $4,000, if under age 50 at the end of 2007.
- $5,000, if age 50 or older but under age 701/2 at the end of 2007.
Otherwise, go to line 2. | | | | 2. | | Enter the amount shown below that applies to you. | | | | | - Single, head of household, or married filing separately and you lived apart
mmfrom your spouse for all of 2007, enter $62,000 | | | | | - Qualifying widow(er), enter $103,000
|  | 2a. | | | 2b. | | | | | | - Married filing jointly, enter $103,000 in both columns. But if you checked
mm"No" on either line 1a or 1b, enter $166,000 for the person who was not
mmcovered by a plan - Married filing separately and you lived with your spouse at any time in 2007,
mmenter $10,000 | | | | 3. | | Enter the amount from Form 1040, line 22 | 3. | | | | | | 4. | | Enter the total of the amounts from Form 1040, lines 23 through 31a, plus any write-in adjustments you entered on the dotted line next to line 36 | 4. | | | | | | 5. | | Subtract line 4 from line 3. If married filing jointly, enter the result in both columns | 5a. | | | 5b. | | | | | 6. | | Is the amount on line 5 less than the amount on line 2? | | | | | | No. |  | None of your IRA contributions are deductible. For details on nondeductible IRA contributions, see Form 8606. | | | | | | Yes. | Subtract line 5 from line 2 in each column. Follow the instruction below that applies to you. | | | | | | | - If single, head of household, or married filing separately, and the mmresult is $10,000 or more, enter the applicable amount below on
mmline 7 for that column and go to line 8.
mmmi. $4,000, if under age 50 at the end of 2007.
mmmii. $5,000, if age 50 or older but under age 701/2 at the end
mmmm of 2007.
mmOtherwise, go to line 7. | | 6a. | | | 6b. | | | | | | | | - If married filing jointly or qualifying widow(er), and the result is
mn $20,000 or more ($10,000 or more in the column for the IRA of
mma person who was not covered by a retirement plan), enter the
mmapplicable amount below on line 7 for that column and go to
mmline 8.
mmmi. $4,000, if under age 50 at the end of 2007.
mmmii. $5,000 if age 50 or older but under age 701/2 at the end
mmmm of 2007.
mmOtherwise, go to line 7. | | | |
taxmap/instr/i1040gi-011.htm#w24811v44
IRA Deduction Worksheet—Line 32 (continued) | | | | | | Your IRA | Spouse's IRA | | | 7. | | Multiply lines 6a and 6b by the percentage below that applies to you. If the result is not a multiple of $10, increase it to the next multiple of $10 (for example, increase $490.30 to $500). If the result is $200 or more, enter the result. But if it is less than $200, enter $200. | | | | | - Single, head of household, or married filing separately, multiply by 40%
mm(.40)(or by 50% (.50) in the column for the IRA of a person who is age
mm50 or older at the end of 2007) | | 7a. | | | 7b. | | | | | | - Married filing jointly or qualifying widow(er), multiply by 20% (.20) (or by
mm25% (.25) in the column for the IRA of a person who is age 50 or older at
mmthe end of 2007). But if you checked "No" on either line 1a or 1b, then in
mmthe column for the IRA of the person who was not covered by a retirement
mmplan, multiply by 40% (.40) (or by 50% (.50) if age 50 or older at the end
mmof 2007) | | | | 8. | | Enter the total of your (and your spouse's if filing jointly): | | | | | | | | - Wages, salaries, tips, etc. Generally, this is the
mmamount reported in box 1 of Form W-2. See page 27
mm for exceptions | m8. | | | | | | | - Alimony and separate maintenance payments reported
mm on Form 1040, line 11 | | | | | | | - Nontaxable combat pay. This amount should be
mm reported in box 12 of Form W-2 with code Q | | | | | | | | | | | | | 9. | | Enter the earned income you (and your spouse if filing jointly) received as a self-employed individual or a partner. Generally, this is your (and your spouse's if filing jointly) net earnings from self-employment if your personal services were a material income-producing factor, minus any deductions on Form 1040, lines 27 and 28. If zero or less, enter -0-. For more details, see Pub. 590 | 9. | | | | | | 10. | | Add lines 8 and 9 | 10. | | | | | | | | | | | | | | | | | | | | If married filing jointly and line 10 is less than $8,000 ($9,000 if one spouse is age 50 or older at the end of 2007; $10,000 if both spouses are age 50 or older at the end of 2007), stop here and see Pub. 590 to figure your IRA deduction. | | | | 11. | | Enter traditional IRA contributions made, or that will be made by April 15, 2008, for 2007 to your IRA on line 11a and to your spouse's IRA on line 11b | 11a. | | | 11b. | | | | | 12. | | On line 12a, enter the smallest of line 7a, 10, or 11a. On line 12b, enter the smallest of line 7b, 10, or 11b. This is the most you can deduct. Add the amounts on lines 12a and 12b and enter the total on Form 1040, line 32. Or, if you want, you can deduct a smaller amount and treat the rest as a nondeductible contribution (see Form 8606) | 12a. | | | 12b. | | | | | | | | | | |
You can take this deduction only if all of the following apply.
- You paid interest in 2007 on a qualified student loan (see below).
- Your filing status is any status except married filing separately.
- Your modified adjusted gross income (AGI) is less than: $70,000 if single, head of household, or qualifying widow(er); $140,000 if married filing jointly. Use lines 2 through 4 of the worksheet below to figure your modified AGI.
- You, or your spouse if filing jointly, are not claimed as a dependent on someone's (such as your parent's) 2007 tax return.
Use the worksheet below to figure your student loan interest deduction.
Use Pub. 970 instead of the worksheet below to figure your student loan interest deduction if you file Form 2555, 2555-EZ, or 4563, or you exclude income from sources within Puerto Rico.
A qualified student loan is any loan you took out to pay the qualified higher education expenses for any of the following individuals.
- Yourself or your spouse.
- Any person who was your dependent when the loan was taken out.
- Any person you could have claimed as a dependent for the year the loan was taken out except that:
- The person filed a joint return,
- The person had gross income that was equal to or more than the exemption amount for that year ($3,400 for 2007), or
- You, or your spouse if filing jointly, could be claimed as a dependent on someone else's return.
The person for whom the expenses were paid must have been an eligible student (see this page). However, a loan is not a qualified student loan if (a) any of the proceeds were used for other purposes, or (b) the loan was from either a related person or a person who borrowed the proceeds under a qualified employer plan or a contract purchased under such a plan. To find out who is a related person, see Pub. 970.
taxmap/instr/i1040gi-011.htm#w24811v05
|
Student Loan Interest Deduction Worksheet—Line 33 - Figure any write-in adjustments to be entered on the dotted line next to line 36 (see the instructions for line 36 on page 31).
- Be sure you have read the Exception above to see if you can use this worksheet instead of Pub. 970 to figure your deduction.
| | | | 1. | | Enter the total interest you paid in 2007 on qualified student loans (see above). Do not enter more than $2,500 | 1. | | | | 2. | | Enter the amount from Form 1040, line 22 | 2. | | | | | 3. | | Enter the total of the amounts from Form 1040, lines 23 through 32, plus any write-in adjustments you entered on the dotted line next to line 36 | 3. | | | | | 4. | | Subtract line 3 from line 2 | 4. | | | | | 5. | | Enter the amount shown below for your filing status. | | | | | - Single, head of household, or qualifying widow(er)—$55,000
- Married filing jointly—$110,000
| | 0 | 5. | | | | | 6. | | Is the amount on line 4 more than the amount on line 5? | | | | | | | | No. | Skip lines 6 and 7, enter -0- on line 8, and go to line 9. | | | | | | | | Yes. | Subtract line 5 from line 4 | 6. | | | | | 7. | | Divide line 6 by $15,000 ($30,000 if married filing jointly). Enter the result as a decimal (rounded to at least three places). If the result is 1.000 or more, enter 1.000 | 7. | 000. | | | 8. | | Multiply line 1 by line 7 | 8. | | | | 9. | | Student loan interest deduction. Subtract line 8 from line 1. Enter the result here and on
Form 1040, line 33. Do not include this amount in figuring any other deduction on your return (such as on Schedule A, C, E, etc.) | 9. | | | | | | |
Qualified higher education expenses generally include tuition, fees, room and board, and related expenses such as books and supplies. The expenses must be for education in a degree, certificate, or similar program at an eligible educational institution. An eligible educational institution includes most colleges, universities, and certain vocational schools. You must reduce the expenses by the following benefits.
- Employer-provided educational assistance benefits that are not included in box 1 of Form(s) W-2.
- Excludable U.S. series EE and I savings bond interest from Form 8815.
- Any nontaxable distribution of qualified tuition program earnings.
- Any nontaxable distribution of Coverdell education savings account earnings.
- Any scholarship, educational assistance allowance, or other payment (but not gifts, inheritances, etc.) excluded from income.
For more details on these expenses, see Pub. 970.
An eligible student is a person who:
- Was enrolled in a degree, certificate, or other program (including a program of study abroad that was approved for credit by the institution at which the student was enrolled) leading to a recognized educational credential at an eligible educational institution, and
- Carried at least half the normal full-time workload for the course of study he or she was pursuing.
If you paid qualified tuition and fees for yourself, your spouse, or your dependent(s), you may be able to take this deduction. See Form 8917.
| You may be able to take a credit for your educational expenses instead of a deduction. See the instructions for line 49 on page 37 for details. |
You may be able to deduct up to 6% of your qualified production activities income from the following activities.
- Construction of real property performed in the United States.
- Engineering or architectural services performed in the United States for construction of real property in the United States.
- Any lease, rental, license, sale, exchange, or other disposition of:
- Tangible personal property, computer software, and sound recordings that you manufactured, produced, grew, or extracted in whole or in significant part within the United States,
- Any qualified film you produced, or
- Electricity, natural gas, or potable water you produced in the United States.
The deduction does not apply to income derived from:
- The sale of food and beverages you prepared at a retail establishment;
- Property you leased, licensed, or rented for use by any related person;
- The transmission or distribution of electricity, natural gas, or potable water; or
- The lease, rental, license, sale, exchange, or other disposition of land.
For details, see Form 8903 and its instructions.
Include in the total on line 36 any of the following write-in adjustments. To find out if you can take the deduction, see the form or publication indicated. On the dotted line next to line 36, enter the amount of your deduction and identify it as indicated.
- Archer MSA deduction (see Form 8853). Identify as
MSA.
- Jury duty pay if you gave the pay to your employer because your employer paid your salary while you served on the jury. Identify as
Jury Pay.
- Deductible expenses related to income reported on line 21 from the rental of personal property engaged in for profit. Identify as
PPR.
- Reforestation amortization and expenses (see Pub. 535). Identify as
RFST.
- Repayment of supplemental unemployment benefits under the Trade Act of 1974 (see Pub. 525). Identify as
Sub-Pay TRA.
- Contributions to section 501(c)(18)(D) pension plans (see Pub. 525). Identify as
501(c)(18)(D).
- Contributions by certain chaplains to section 403(b) plans (see Pub. 517). Identify as
403(b).
- Attorney fees and court costs for actions settled or decided after October 22, 2004, involving certain unlawful discrimination claims, but only to the extent of gross income from such actions (see Pub. 525). Identify as
UDC.
- Attorney fees and court costs paid by you in connection with an award from the IRS for information you provided after December 19, 2006, that substantially contributed to the detection of tax law violations, up to the amount of the award includible in your gross income. Identify as
WBF.
If line 37 is less than zero, you may have a net operating loss that you can carry to another tax year. See the Instructions for Form 1045 for details.
Previous Page: Instructions for Form 1040 - Income
Next Page: Instructions for Form 1040 - Tax and Credits
