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Ask the tax adviser
By George Saenz •
Bankrate.com
 March
28, 2000 -- Today, the tax adviser discusses employer-paid tuition
reimbursements and tax issues regarding commuting to work.
Higher education tax
credits
Dear Tax Talk:
The company I work for has an education reimbursement program that
pays for up to $4,000 in a qualified degree program. I'm registered
in an MBA program and have exceeded this amount. First, I would
like to know if I have to pay taxes on the reimbursed amounts. Second,
I would like to know if I can deduct the amount that I've paid for.
Thanks,
Ann
Dear Ann:
Congress felt that too much education should not receive a tax benefit.
So several years ago the legislators changed the law to provide
that employer-paid graduate-level courses after June 30, 1996, are
not excludable from an employee's income. Accordingly, your employer
should include your tuition reimbursements in your wages and withhold
taxes. Fortunately, however, you can claim the Lifetime Learning
Credit for amounts you pay and the amounts included by your employer
in wages.
To find out more on the Lifetime Learning credit,
check out the March 17 Tax
Talk column, Bankrate.com's education
credits basics, a recent Bankrate.com tax
tip, and Form
8863 and Publication
970 from the Internal Revenue Service.
Deductible
driving
Dear Tax Talk:
In my current job, I work about 120 miles from home, where I am
a homeowner. I work a shift schedule that is 3 days on and 3 days
off. Working 14 hours a day on my days on makes it impractical to
commute during my "on shift." I maintain a small apartment
where I stay during these three days. Are any of my living expenses
while in my work area deductible or do I just have to suck it up
and pony up to Uncle Sam?
Scott
Dear Tax Talk:
I travel 168 miles round trip each day to work. Can I claim the
mileage? If so, what form would I use? Is there a standard rate?
Thanks.
Ron
Dear Scott:
From your tone, I think you know you're going to have to suck it
up or move closer. Travel expenses incurred while "away from
home" are generally deductible as expenditures connected with
the conduct of a business. However, in the situation you describe,
IRS would treat the small apartment as your "tax home"
and your choice to reside at a distant location as a personal consideration.
Hence, the expenditures to maintain the small apartment are personal
and therefore not deductible.
Similarly, Ron:
Commuting is a personal expenditure and not deductible. Unfortunately,
because you have a longer commute than most people does not make
the commute from home deductible.
-- Posted March
28, 2000
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