Getting reimbursed for taxes from job-related tuition benefits
January 22, 2014 9:53 AM Subscribe
My husband is completing his masters degree at the university where he also works. He gets tuition benefits, but any tuition benefit he receives over $5250 per year is taxable. The university treats those taxes as part of the tuition bill (they are about 37%) and we pay them out of pocket. According to our university, we should be able to get reimbursed for the taxes that we paid, given that the tuition counts as a job related expense. How do we do this? Bonus: how do we do this... on TurboTax?
posted by ancient star to Law & Government (14 answers total) 2 users marked this as a favorite
The total cost of tuition for 2013 was 11363, according to his 1098T. Because of the education deduction, the taxable amount was 11363-5250 = 6113. His employer withholds the tax on that amount at 37%, leaving that for us to pay directly to student billing. We paid 2117.50 this year. His employer paid 9127.21. (The remaining 118.29 was a credit on his student account left over from his enrollment deposit in 2012.)
The education (a master's degree) is a job-related deductible expense, so the entire value should be deductible, and we should get back the 2117.50, or at least the federal part of it. (If we show his employer that the IRS accepted it as a job-related expense, they will return the social security, etc. to us.)
How should we input this into the TurboTax system? The tuition and job-related expense sections are different, and we're not sure what to put where.
Obligatory YANMA, YANMCPA, etc. Thank you!