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Thread: Tuition Reimbursement Contracts

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    God/dess SnuffleUffleGrass's Avatar
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    Default Tuition Reimbursement Contracts

    Has anyone done this? It's usually through an employer. Just wondering if there is any downside.

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    God/dess lynn2009's Avatar
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    Default Re: Tuition Reimbursement Contracts

    It's taxable income
    "There are different kinds of darkness. There is darkness that frightens, the darkness that soothes, the darkness that is restful. There is the darkness of lovers, and the darkness of assassins. It becomes what the bearer wishes it to be, needs it to be. It is not wholly bad or good."
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    Veteran Member Dominic.2's Avatar
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    Default Re: Tuition Reimbursement Contracts

    Most give you the first $5250 a calendar year, as a write off to the business (this is the IRS limit). I've never had to pay the taxes on the first $5250. For the amount over $5250, that additional amount is taxable, and it shows up added to my gross wages on my W-2. Most years, for example, I'll use an extra $3K, and pay maybe an additional <$1K in taxes. So I still come out ahead (versus paying it all from out of pocket).

    Also we have to get a C or better grade for undergrad and B or better for graduate school. But honestly you should be getting those grades anyway (yes, there is grade inflation these days). Plus we have to work for them for 6months after the reimbursement or we have to pay the money pack.

    Other than taxes, I see no downside.
    Last edited by Dominic.2; 02-16-2016 at 12:47 PM. Reason: Clarity

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    God/dess lynn2009's Avatar
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    Default Re: Tuition Reimbursement Contracts

    Quote Originally Posted by Dominic.2 View Post
    Most give you the first $5250 a calendar year, as a write off to the business (this is the IRS limit). I've never had to pay the taxes on the first $5250. For the amount over $5250, that additional amount is taxable, and it shows up added to my gross wages on my W-2. Most years, for example, I'll use an extra $3K, and pay maybe an additional <$1K in taxes. So I still come out ahead (versus paying it all from out of pocket).
    Yes, and this. Sorry for previous brevity, I was at work. My tuition benefits last year were 6k so the extra taxes weren't noticeable but if I want to take 6 classes a year (2 classes in the spring, summer and fall) that would be quite a rough financial hit. So I think it's more of a consideration if you want to finish a full program.

    Undergraduate tuition benefits aren't taxable actually.

    My company takes it out of my checks also but a lot don't, you would need to claim it separately and a lot of people I know don't claim it and plan to plead ignorance if they ever get caught on an audit.

    Also remember a lot of companies will only pay for classes in the field you are already in.
    "There are different kinds of darkness. There is darkness that frightens, the darkness that soothes, the darkness that is restful. There is the darkness of lovers, and the darkness of assassins. It becomes what the bearer wishes it to be, needs it to be. It is not wholly bad or good."
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    Default Re: Tuition Reimbursement Contracts

    You most likely have to commit to x number of years of service to the company after you get the degree. Sucky if you don't like those kind of commitments but good if you like the company and are certain you will be staying.
    “Cook for him like a housewife, fuck him good like a nympho….pay the rent and the car note, he invests in me like crypto”

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