Tax Question: Tuition reimbursement and standard deductions

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PlayingLife
Posts: 399
Joined: Sun Dec 29, 2013 2:10 pm

Tax Question: Tuition reimbursement and standard deductions

Post by PlayingLife »

Hi everyone,

In 2013 I started my MBA, and am lucky to have an employer that will fully reimburse me. Here's how it works; I front 100% of the money in the beginning of the semester on my personal credit card. Right away I submit my receipts to my employer, and 50% of the tuition cost is direct deposited to me as a reimbursement (is not considered income and is not on my tax forms). Once I complete the semester, the remaining 50% is reimbursed to me.

I received a 1098-T from my university showing $22,648.71 for payments received for qualified tuition and related expenses (item #1). My three questions are, can I, should I, and how do I, deduct this?

Now, the question "should I?" has to do with an earlier post (listed below), as I'm wondering if deducting tuition replaces the standard deductions we're entitled to. Since I'm newly married and filing jointly, I can see from the wonderful people on here how we would normally save by MFJ. Now that we have our forms, I can share that my gross came in at $138069 with total W-2 Wages of $128,710 after deferred comp (line 1). My wife ended with W-2 Wages of $39,000. Any insight or thoughts on what to do taking the tuition 1098 into account is greatly appreciated!

http://www.bogleheads.org/forum/viewtop ... 2&t=129981
pshonore
Posts: 8205
Joined: Sun Jun 28, 2009 2:21 pm

Re: Tax Question: Tuition reimbursement and standard deduct

Post by pshonore »

It sounds like your net outlay is $0 (after reimbursement) and therefore no deduction or credit is available
HouseStark
Posts: 324
Joined: Mon Oct 15, 2012 2:31 pm
Location: Minneapolis, MN

Re: Tax Question: Tuition reimbursement and standard deduct

Post by HouseStark »

I second that reply. As a general rule for any tax benefit based on an expense, if you are reimbursed for that expense and that reimbursement is non-taxable, then your out-of-pocket expense is zero and you cannot claim any tax benefit since you have no expense.
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