Learning is never over for professionals in all fields. The healthcare field requires constant classes to keep up with the rapid medical advances. Changes in federal, state, or company policy, could demand that current professionals receive further certification. Sudden moves across state lines, could require you to meet state standards not required in your original state. And let’s not forget the urge to switch tracks to pursue a different career entirely could lead us back to college.
At this stage, you might feel the need to have a toddler style tantrum over the idea of sinking more money into your education. Before you hit the floor, here’s a bit of good news: written within the IRS tax code are systems designed to help United States citizens afford to pursue higher education.
Employer Education Assistance Programs
Businesses have a looong history off offering their employees education based perks to their employees and their employee’s family through scholarships, grants, and educational programs. Recently, Starbucks has upped the ante by offering to pay all of the tuition costs for employees who wish to pursue a bachelor’s degree from Arizona State University.
The Starbuck’s education program is derived from the tax code regarding employer assistance programs. Professionals can afford college by seeking a job at a company have one of these programs. Before you dive in, here’s a fun story to let you know what you need to know:
Billy-Bob is ecstatic that his employer ForeverSadandLonely Incorporated has implemented an Employer Assistance Program. The program will give him $10,000 dollars. The HR expert Barbara Ann explained that $5,250 of the program would be tax free, the other not be $4,750 would show up on his W-2 as taxable income. The program, upholding the laws of the IRS, helped him pay for tuition, class fees, books, supplies and equipment. Billy-Bob was annoyed he would have to pay for the rock climbing and knitting class out of pocket since the government program does not cover any recreational or hobby classes.
Work Education Fringe Benefits
Whether or not your current employer offers an education assistance program, the courses you plan to take might qualify as a business deduction. Work related education fringe benefits business education are expenses spent on education that can be deducted on your tax return. In order to utilize these benefits, the educational program must meet a few different requirements.
Check out the following stories to figure out what qualifies:
Cynthia Ruth is a nurse who is being required by her employer to take a communications course and by the Idaho State government to take a refresher course on medical technology in order to maintain her job, her salary, and her status as a nurse. Due to the fact that both the courses serve a business purpose, she can file the education fees as an education fringe benefit on her tax return.
On the other hand,
Polly-Ann’s is the head of marketing. Her employer has demanded that she pursue a psychology degree to maintain her position as head of marketing to help her understand how to market more effectively to their target audience. In this case, Polly cannot file the degree as a business expense on her tax return because the degree would qualify her to enter another field.
Kelly is interning as an engineer while pursuing a bachelor in engineering from a local college. In order to maintain her position after the internship, she will need to graduate. Unfortunately, Kelly cannot file the education as a business expense because a bachelor in engineering is a minimum educational requirement for engineers by the business and the field.
If you’re education is lucky enough to qualify as a business expense, you will need to make an itemized list of all the educational costs that are tax deductible. You can find more information on the topic here.
Graduating college without student debt is extremely hard. Thankfully, the IRS financial code allows US citizens to utilize employer education assistance and business fringe benefits to pursue higher education while limiting debt. If you cannot escape all student debt, it will be up to you to come up with a manageable payment plan. Don’t forget that you can significantly decrease the overall amount paid on loans by paying off some of the loans while you are in college.
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