Taxes for a Healthcare School??

Question

I work for a Healthcare School and I want to do the LPN program. The whole amount is 17,500 and the owner is only giving me a 1,000 discount. I heard that he can give me 40% off and use it on his taxes and he will get the same amount of money back. How can I prove this? Is there a website that I can show him? And what difference would it be if he still got the same amount of money back?

Best answer 10 points!

Answer 1

The plan you are thinking of is the employer provided tuition plan that allows an employer to pay for up to $5250 of your tuition and then not include it in your pay. This has to be done under a written plan and made available to all employees and would include your going to school at, say, Harvard. This plan *is* money out of your employer's pocket.

The other plan is the tuition reduction plan. If the school meets all IRS requirements (again, written plan and available to all employees), the school can discount some or all of your tuition and it would be counted as a working fringe benefit. The cost to the school will be whatever marginal expense they incur for one more student. Your school has clearly already looked at this and said they would provide a $1,000 discount and that's it. (Keep in mind, if you don't pay the full $17,500 in tuition, that's money they didn't get and can't spend.)

Keep in mind that *you* are eligible for the Tuition deduction or Lifetime learning credit which will help you reduce your taxes.

Answer 2

You can't prove it because it's not true. His only tax advantage would be the income foregone and the tax benefit for that would depend upon the school's tax bracket.