Tax Ramifications of Firm Tuition Payment?? : Part-Time MBA Programs
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# Tax Ramifications of Firm Tuition Payment??

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Manager
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Tax Ramifications of Firm Tuition Payment?? [#permalink]

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08 Apr 2009, 07:41
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? Senior Manager Joined: 04 Aug 2008 Posts: 377 Followers: 5 Kudos [?]: 34 [0], given: 1 Re: Tax Ramifications of Firm Tuition Payment?? [#permalink] ### Show Tags 08 Apr 2009, 08:13 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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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink]

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08 Apr 2009, 09:44
So is that amount above the cap taxed at your income tax rate?
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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink]

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08 Apr 2009, 10:27
IRS non-taxable amount is currently \$5,250/year. Anything greater is taxed as income.
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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink]

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08 Apr 2009, 10:52
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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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink]

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09 Apr 2009, 07:50
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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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink]

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10 Apr 2009, 05:19
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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink]

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14 Apr 2009, 13:39
So it can be classifed as nto income based on page 22? I believe I will have taxes taken out when I attain reinbursement.
Re: Tax Ramifications of Firm Tuition Payment??   [#permalink] 14 Apr 2009, 13:39
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