Employer Paid Education Taxable
December 15th, 2008
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Question: What are the tax benefits for my situation?
I am paid a salary to go to grad school. A got a w2 for this salary a few days ago. In addition, the tuition is paid for but is considered taxable. I also received a w2 form for this tuition payment to my school. I have a few odd quesitons that hopefully someone can help me out with concerning taxes.
I'm used to paying my own tuition in college and then taking the credit later when taxes come. In this case however do I get the same lifetime learning credit? My employer sent a check to my school, so I didn't see it. I do have the w2 saying that the $10,000 is considered wages. Very confusing to me. I feel that if I was given the $10000 as part of my normal wages and then paid the tuition out of my pocket, the situation is the same, but more clear.
In addition, do I only pay tax on $4750 because of the "fringe benefits for employer paid education" clause of $5250 (from IRS pub 970)?
Answer: A tax accountant would better answer your question. However, if you went to school part time, then the 10,000 your employer paid for tuition is considered income; I think there may be taxation on fringe benefits.... If you went to school full time, it may be a tax write-off, only if the training in related to your profession or line of work. Your better off consulting a tax accountant to help you with this stuff.
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