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Tax Ramifications of Firm Tuition Payment??

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spgny
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Tax Ramifications of Firm Tuition Payment?? [#permalink] Tax Ramifications of Firm Tuition Payment??   08 Apr 2009, 08:41
Is it true that when a firm pays your tuition, say $25,000K year, the employee is responsible for this as taxable income...you have to add it to total income and pay taxes?
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spiridon
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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink] Tax Ramifications of Firm Tuition Payment??   08 Apr 2009, 09:13
yeah, there is non-taxable cap, think its around $5000 give or take. So, everything above that amount is taxable. Lets say u receive 25k. u deduct 5k (not sure about exact number) and pay taxes on 20k. Unless ur company agrees to pay ur taxes as well.
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spgny
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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink] Tax Ramifications of Firm Tuition Payment??   08 Apr 2009, 10:44
So is that amount above the cap taxed at your income tax rate?
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bean2809
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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink] Tax Ramifications of Firm Tuition Payment??   08 Apr 2009, 11:27
IRS non-taxable amount is currently $5,250/year. Anything greater is taxed as income.
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spgny
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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink] Tax Ramifications of Firm Tuition Payment??   08 Apr 2009, 11:52
So what are some of the current strategies to avoid/minimize taxes in this way? Seems this could have nasty tax ramifications, like possibly putting someone in a higher tax bracket.
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skman
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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink] Tax Ramifications of Firm Tuition Payment??   09 Apr 2009, 08:50
actually, i believe that if a tuition reimbursement program is designed correctly, no amount is taxable if you can classify the educational program a "working condition benefit" as defined in IRS publication 15.
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bean2809
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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink] Tax Ramifications of Firm Tuition Payment??   10 Apr 2009, 06:19
See page 22:

https://www.irs.gov/pub/irs-pdf/p15b.pdf
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vinviper1
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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink] Tax Ramifications of Firm Tuition Payment??   14 Apr 2009, 14:39
So it can be classifed as nto income based on page 22? I believe I will have taxes taken out when I attain reinbursement.
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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink]
14 Apr 2009, 14:39