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Publication 970
Tax Benefits for Education

For use in preparing 2002 Returns

10. How To Get Tax Help

You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help.

Contacting your Taxpayer Advocate.   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate.

The Taxpayer Advocate represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review.

To contact your Taxpayer Advocate:

  • Call the Taxpayer Advocate at 1-877-777-4778.
  • Call, write, or fax the Taxpayer Advocate office in your area.
  • Call 1-800-829-4059 if you are a TTY/TDD user.

For more information, see Publication 1546, The Taxpayer Advocate Service of the IRS.

Free tax services.   To find out what services are available, get Publication 910, Guide to Free Tax Services. It contains a list of free tax publications and an index of tax topics. It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics.

COMPUTE: Personal computer. With your personal computer and modem, you can access the IRS on the Internet at www.irs.gov. While visiting our web site, you can:

  • See answers to frequently asked tax questions or request help by e-mail.
  • Download forms and publications or search for forms and publications by topic or keyword.
  • Order IRS products on-line.
  • View forms that may be filled in electronically, print the completed form, and then save the form for recordkeeping.
  • View Internal Revenue Bulletins published in the last few years.
  • Search regulations and the Internal Revenue Code.
  • Receive our electronic newsletters on hot tax issues and news.
  • Learn about the benefits of filing electronically (IRS e-file).
  • Get information on starting and operating a small business.

You can also reach us with your computer using File Transfer Protocol at ftp.irs.gov.

FAX: TaxFax Service. Using the phone attached to your fax machine, you can receive forms and instructions by calling 703-368-9694. Follow the directions from the prompts. When you order forms, enter the catalog number for the form you need. The items you request will be faxed to you.

For help with transmission problems, call the FedWorld Help Desk at 703-487-4608.

PHONE: Phone. Many services are available by phone.
 
 

  • Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current and prior year forms, instructions, and publications.
  • Asking tax questions. Call the IRS with your tax questions at 1-800-829-1040.
  • Solving problems. Take advantage of Everyday Tax Solutions service by calling your local IRS office to set up an in-person appointment at your convenience. Check your local directory assistance or www.irs.gov for the numbers.
  • TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications.
  • TeleTax topics. Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics.


Evaluating the quality of our telephone services. To ensure that IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. One method is for a second IRS representative to sometimes listen in on or record telephone calls. Another is to ask some callers to complete a short survey at the end of the call.

WALKIN: Walk-in. Many products and services are available on a walk-in basis.

  • Products. You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Some IRS offices, libraries, grocery stores, copy centers, city and county governments, credit unions, and office supply stores have an extensive collection of products available to print from a CD-ROM or photocopy from reproducible proofs. Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes.
  • Services. You can walk in to your local IRS office to ask tax questions or get help with a tax problem. Now you can set up an appointment by calling your local IRS office number and, at the prompt, leaving a message requesting Everyday Tax Solutions help. A representative will call you back within 2 business days to schedule an in-person appointment at your convenience.

ENVELOPE: Mail. You can send your order for forms, instructions, and publications to the Distribution Center nearest to you and receive a response within 10 workdays after your request is received. Find the address that applies to your part of the country.

  • Western part of U.S.:
    Western Area Distribution Center
    Rancho Cordova, CA 95743-0001
  • Central part of U.S.:
    Central Area Distribution Center
    P.O. Box 8903
    Bloomington, IL 61702-8903
  • Eastern part of U.S. and foreign addresses:
    Eastern Area Distribution Center
    P.O. Box 85074
    Richmond, VA 23261-5074

CDROM: CD-ROM for tax products. You can order IRS Publication 1796, Federal Tax Products on CD-ROM, and obtain:
 

  • Current tax forms, instructions, and publications.
  • Prior-year tax forms and instructions.
  • Popular tax forms that may be filled in electronically, printed out for submission, and saved for recordkeeping.
  • Internal Revenue Bulletins.

The CD-ROM can be purchased from National Technical Information Service (NTIS) by calling 1-877-233-6767 or on the Internet at http://www.irs.gov/cdorders. The first release is available in early January and the final release is available in late February.

CDROM: CD-ROM for small businesses. IRS Publication 3207, Small Business Resource Guide, is a must for every small business owner or any taxpayer about to start a business. This handy, interactive CD contains all the business tax forms, instructions and publications needed to successfully manage a business. In addition, the CD provides an abundance of other helpful information, such as how to prepare a business plan, finding financing for your business, and much more. The design of the CD makes finding information easy and quick and incorporates file formats and browsers that can be run on virtually any desktop or laptop computer.

It is available in March. You can get a free copy by calling 1-800-829-3676 or by visiting the website at www.irs.gov/smallbiz.

Appendices

The following appendices include an illustrated example of how to use the Form 8863 when claiming both education tax credits at the same time and a chart reflecting some of the major differences between the many tax benefits for higher education that are outlined in this publication.

  1. Appendix A - An Illustrated Example of Education Credits including a filled-in Form 8863 showing how to claim both the Hope credit and lifetime learning credit for 2002.
  2. Appendix B - A chart summarizing some of the differences between the different higher education tax benefits discussed in this publication. It is intended only as a guide. Look in this publication for more complete information.

Appendix A. Illustrated Example of Education Credits

Dave and Valerie Jones are married and file a joint tax return. For 2002, they claim exemptions for their two dependent children on their tax return. Their modified adjusted gross income is $84,000. Their tax, before credits, is $10,625. Their son, Sean, will receive his bachelor's degree in psychology from the state college in May 2003. Their daughter, Corey, enrolled full-time at that same college in August 2001 to begin working on her bachelor's degree in physical education. In July 2002, Dave and Valerie paid $2,200 in tuition costs for each child for the Fall 2002 semester.

Dave and Valerie, their children, and the college meet all of the requirements for the higher education credits. Because Sean is beyond the second (sophomore) year of his postsecondary education, his expenses do not qualify for the Hope credit. But, amounts paid for Sean's expenses in 2002 for academic periods beginning in 2002 qualify for the lifetime learning credit. Corey is in her first two (freshman and sophomore) years of postsecondary education and expenses paid for her in 2002 for academic periods beginning in 2002 qualify for the Hope credit.

Dave and Valerie figure their tentative education credits for 2002, $1,940, as shown in the completed Form 8863. They cannot claim the full amount because their modified adjusted gross income is more than $82,000. They carry the amount from line 18 of Form 8863 to line 48 of Form 1040, and they attach the Form 8863 to their return.

Form 8863 for Dave and Valerie Jones

This chart highlights some differences among the benefits discussed in this publication. See the text for definitions and details. Do not rely on this chart alone. Caution: You generally cannot claim more than one benefit for the same education expense.

Appendix B - Highlights of Tax Benefits for Education for Tax Year 2002
     Hope Credit Lifetime Learning Credit Student Loan Interest Deduction Tuition and Fees Deduction Coverdell ESA 1 Qualified Tuition Program (QTP) 1 Early IRA Withdrawals 1 Education Savings Bond Program 1 Employer-Provided Educational Assistance 1
What is your benefit? Credits can reduce amount of tax you must pay Can deduct interest paid Can deduct expenses Earnings not taxed Earnings not taxed 2 No 10% additional tax on early withdrawal Interest not taxed Employer benefits not taxed
What is the annual limit? $1,500 credit per student $1,000 credit per family $2,500 deduction $3,000 deduction $2,000 contribution per beneficiary None Amount of qualifying expenses Amount of qualifying expenses $5,250 exclusion
What expenses qualify besides tuition and required enrollment fees? None None Books Supplies Equipment   Room & board   Transportation   Other necessary expenses None Books Supplies Equipment   Expenses for special needs services   Payments to QTP   Higher education:  Room & board if at  least half-time  student   Elem/sec (K-12) education:  Tutoring  Room & board  Uniforms  Transportation  Computer access  Supplementary   expenses Books Supplies Equipment   Room & board if at least half-time student   Expenses for special needs services Books Supplies Equipment   Room & board if at least half-time student   Expenses for special needs services Payments to Coverdell ESA   Payments to QTP Books Supplies Equipment
What education qualifies? 1st 2 years of undergraduate (postsecondary) Undergraduate & graduate   Courses to acquire or improve job skills Undergraduate & graduate Undergraduate & graduate Undergraduate & graduate   K-12 Undergraduate & graduate Undergraduate & graduate Undergraduate & graduate Undergraduate & graduate
What are some of the other conditions that apply? Can be claimed for only 2 tax years   Must be enrolled at least half-time in degree program   No felony drug conviction(s) Must have been at least half-time student in degree program Cannot claim both deduction & education credit for same student in same year Must withdraw assets at age 30 unless special needs beneficiary Applies only to qualified series EE bonds issued after 1989 or series I bonds
In what income range do benefits phase out? $41,000 - $51,000   $82,000 - $102,000 for joint returns $50,000 - $65,000   $100,000 - $130,000 for joint returns No deduction if income is more than $65,000 ($130,000 for joint returns) $95,000 - $110,000   $190,000 - $220,000 for joint returns No phaseout No phaseout $57,600 - $72,600   $86,400 - $116,400 for joint returns No phaseout
1 Any nontaxable withdrawal is limited to the amount that does not exceed qualifying educational expenses.
2 Does not apply to distributions from QTPs sponsored by educational institution until 1/1/04; however, no 10% additional tax is imposed.

Tax Publications and Commonly Used Forms for Individual Taxpayers