MsTabbyKats Posted March 28, 2014 Report Posted March 28, 2014 New client...before now self prepared From 2009-2012 client went to school for Master's Employer paid...but was included in W-2 Client got 1098-T each year...but did nothing with them Client left job Client had to reimburse employer $38,000 in 2013. Yes...I know he can amend prior years for credits. Assuming that the education was not for entry level and that he already met the minimum requirements (meaning he could have taken the tuition on his A) can he deduct the $38K for 2013? Quote
Pacun Posted March 28, 2014 Report Posted March 28, 2014 He qualified for Life Learning Credit and you should amend 2010 before April 15 and then relax with the other years. I bet you that ONLY after 5K (or something), it showed on his W-2 so repaying his employer $38K should mean something like repaying $20k. Why will you use Schedule A when you can use Life Learning Credit? I see... why you mention that. It is because when he repaid he was not in school. I would amend as much as I can. Quote
MsTabbyKats Posted March 28, 2014 Author Report Posted March 28, 2014 I know I can amend....but I want opinions about taking this as a 2013 deduction. He just told me he never claimed the credit because he was reimbursed. Now he's not reimbursed....and the 1098-Ts do show this much tuition! Quote
Pacun Posted March 28, 2014 Report Posted March 28, 2014 I know I can amend....but I want opinions about taking this as a 2013 deduction. He just told me he never claimed the credit because he was reimbursed. Now he's not reimbursed....and the 1098-Ts do show this much tuition! Reimbursed only about 5K. That's the IRS limit, so the rest is added to the W2 and it is taxable and qualifies for the Life Learning Experience. Quote
MsTabbyKats Posted March 28, 2014 Author Report Posted March 28, 2014 Reimbursed only about 5K. That's the IRS limit, so the rest is added to the W2 and it is taxable and qualifies for the Life Learning Experience. Are you saying an employer can only reimburse you up to 5K per year? Quote
joanmcq Posted March 28, 2014 Report Posted March 28, 2014 The employer can offer up to 5k in education benefits pre tax. The rest would be taxable. Quote
Pacun Posted March 28, 2014 Report Posted March 28, 2014 Are you saying an employer can only reimburse you up to 5K per year? Correct, per IRS regulations. Quote
MsTabbyKats Posted March 28, 2014 Author Report Posted March 28, 2014 WHAT $38K why did they quit? I don't know....maybe a better job...maybe it's too cold there... Quote
MsTabbyKats Posted March 28, 2014 Author Report Posted March 28, 2014 So...back to my question...do you think he can deduct the taxable part of the $38K in 2013? Quote
Lion EA Posted March 28, 2014 Report Posted March 28, 2014 No, because he did not pay the education expense in 2013 (he repaid his ex employer). Deal with the years in which he actually paid for education. Quote
Gail in Virginia Posted March 28, 2014 Report Posted March 28, 2014 But ignoring that it was for education, if he was previously taxed on this $38,000 and has to repay it in 2013, then can't he either deduct it on Sch A or take it as credit under claim of right, as explained in Pub 525? Would that do him more good than going back for education credits when he did not pay for the education he just repaid his employer? 1 Quote
MsTabbyKats Posted March 28, 2014 Author Report Posted March 28, 2014 But ignoring that it was for education, if he was previously taxed on this $38,000 and has to repay it in 2013, then can't he either deduct it on Sch A or take it as credit under claim of right, as explained in Pub 525? Would that do him more good than going back for education credits when he did not pay for the education he just repaid his employer? Excellent...Pub 535....Page 34 ....Method 1 1 Quote
joanmcq Posted March 28, 2014 Report Posted March 28, 2014 It's a claim of right. Follow under those rules. Quote
MsTabbyKats Posted March 29, 2014 Author Report Posted March 29, 2014 Unbelievably my program has a list of possible Schedule A deductions....and the repayment is right there. Thanks guys.... Quote
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.