| Topic Name: |
Tuition Reimbursement |
| Message Name: |
Taxes |
| Date Posted: |
08/22/2001 |
| In Reply To: |
I am with a small firm and am entering into the contract arrangements for a top B-school. My question to you is: Did you pay taxes on the 40K that your employer dished out? I know that there is a tax exemption up to about 5K but that is a drop of what my tuition will be. Please advise.
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| Message: |
I know you didn't direct the question to me, but here is my experience.
I got dinged for Social Security at the end of the year, and the reimbursement did show up on my W2 (under the benefits line). I had to pay taxes on the reimbursement, but I was able to alleviate this somewhat with the life long learning deduction.
Some firms do not treat reimbursement as a taxable benefit. They write off the tuition as an expense rather than as a payroll type item.
You should check with your firm to see how they treat the reimbursement in their accounting, and if they treat it as a benefit, you should check with your accountant to see how much you can deduct with the various education tax credits.
Bottom line is: if you can get someone else to pay for your education (especially to a top program) it is a no-brainer to take it, tax liability or no.
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