""Employees are encouraged to consult their tax advisor for information on potential tax issues. Based on current law at the time this Procedure was effective, annual education reimbursements up to $5,250 will be non-taxable for undergraduate and graduate courses. Reimbursements over $5,250 are only permitted for graduate level work, and will be considered taxable income for the employee.""

So, if the company reimbursement is 25,000 (at one time), I would be taxed for that as if it were income. How can I assess how much that amount is?

7/26/2010 11:08:44 AM

Can your HR department not answer this?

7/26/2010 11:13:49 AM

^this isnt chit chat

7/26/2010 11:23:55 AM

from what you posted is it not as simple as subtracting $5,250 from $25,000? And from what else I gather you must use it for graduate level work only.

7/26/2010 11:30:14 AM

^^

that's a perfectly valid response.

I don't think anyone can give you a definitive answer on your particular tax situation, there'll be other things at play such as your tax bracket, witholdings, etc.

You also didn't cite what you were quoting. Is that from your employer, the IRS, or some blog you read?

I'm not even sure that statement is correct unless this is a new expansion of what defines taxable income. I've never seen that before.

7/26/2010 11:37:35 AM

It could be as simple as requiring you to pay taxes on the 25000 as though it was a 25000 increase in compensation.

I know here, we have a few guys working on MBAs and the firm just pays for it as they go, provided they're taking a minimum of six hours and maintain a threshold gpa in those courses. Reimbursing for costs in the five figures instead of just paying up front seems like an unnecessary PITA for both parties.

One of the partners here actually recently finished getting his bachelor's online...I think it was just for personal reasons, like a sense of accomplishment, since he was already a multimillionaire without it.

[Edited on July 26, 2010 at 11:48 AM. Reason : x]

7/26/2010 11:47:00 AM

i think contacting your HR department is the best answer. we don't work at your company. i don't think that's a chit chat type of response either.

7/26/2010 11:51:18 AM

Specifically, Carol in HR would probably be your best bet.

7/26/2010 11:58:54 AM

I would think this would factor into to be taxed but wouldnt necessarily be income to you (eg put on a w-2).

Def ask your HR and call a tax advisor like they say.

7/26/2010 12:00:30 PM

Quote :

"Employees are encouraged to consult their tax advisor for information on potential tax issues."

7/26/2010 12:04:15 PM

Quote :

"this isnt chit chat"

No shit.

7/26/2010 12:06:14 PM

this thread went downhill fast

7/26/2010 12:52:18 PM

i think you got the only answers we can provide.

7/26/2010 1:14:25 PM

Well it depends company to company. There are a few different ways that they figure withholdings on large payouts like this or bonuses, some will take out way too much and others won't take out enough, it may just depend on whatever software they are using. My wife's company is a large company and she gets performance bonuses every quarter which have had about 40% withheld. So in this situation you'd see ~$17k ($5k + .6*$20k). Now where that puts you when it comes time to file your taxes is going to depend on many things (how much you have been withholding, deductions, credits, etc) but you can get a pretty good idea of how to correct your w-4 to make up for any surplus or deficit you may end up with come tax time here:

http://www.irs.gov/individuals/article/0,,id=96196,00.html

7/26/2010 1:50:18 PM