William Penn Life, 2001 (36. évfolyam, 1-12. szám)
2001-03-01 / 3. szám
Work-related education can pay off at tax time THAT’S A QUESTION YOU MAY not have asked yourself very often, if ever. But, it’s one you should ask yourself at least once a year. We can’t stress enough the importance of regularly checking the beneficiaries listed on your life insurance policies. It is the only way to ensure that the people you want to receive the benefits of your life insurance are the ones who will receive it. Think about the changes that have occurred in your life since you purchased your life insurance. Getting married, having children, losing a loved one, getting divorced, getting remarried—all these life changes affect your responsibilities. Do the beneficiaries currently listed on your life insurance policies reflect such changes? If you think you need to update the beneficiaries listed on your policies—either primary or secondary beneficiaries-contact your WPA representative. Or, call our Home Office toll-free at 1-800-848-7366. from CPA Client Bulletin If you take educational courses that are related to your work, you may be able to deduct some of these expenses as business expenses. To be able to deduct work-related educational expenses, you must: • be working; • itemize your deductions on Schedule A of Form 1040 if you are an employee;, and • have qualifying educational expenses. Education that meets at least one of the following two tests is considered qualifying education: 1) The education is required by your employer or the law to keep your present salary, status or job. The required education must serve a bona fide business purpose of your employer. 2) The education maintains or improves skills needed in your present work. You can deduct the expenses for qualifying education even if the education could lead to a degree. Education that your employer requires or is required by law must not be part of a program that will qualify you for a new trade or business. When you get more education than your employer or the law requires, the additional education is qualifying only if it maintains or improves skills required in your present work. Courses that maintain or improve your skills can include refresher courses, courses on current developments and academic or vocational courses. Non-qualifying education costs include those that are: • needed to meet the minimum educational requirements of your present trade or business; or • part of a program of study that can qualify you for a new trade or business. For example, let's say that you are an accountant and work for a company that requires you to get a law degree at your own expense. Even if you do not intend to become a lawyer, the education does not qualify because the law degree will qualify you for a new trade or business. Educational expenses that can be deducted include: • Tuition and lab fees; • Books and supplies; • Certain transportation and travel costs; and • Other educational expenses, such as costs of research and typing when writing a paper as part of an educational program. However, if you are entitled to receive reimbursement from your employer but don't claim it, you can not deduct the expenses that apply to the reimbursement. Many taxpayers are unaware that you can deduct local transportation costs from work to school. If you are regularly employed and go to school on a temporary basis, you can also deduct the costs of returning from school to home. This applies regardless of the location of the school, the distance traveled, or whether you attend school on non-work days. You can also deduct travel and meal expenses if you travel overnight to obtain qualified education, and the main purpose of the trip is to attend a work-related course or seminar. If you receive educational assistance benefits from your employer, you can exclude up to $5,250 of those benefits each year. This means that your employer should not include the benefits with your wages and other compensation in box 1 of your Form W-2, and it also means that you do not have to include the benefits on your income tax return. |WPL| Copyright (c) 2001 CPA Client Bulletin, The American Institute of Certified Public Accountants, Inc. Jersey City, N.J. 4 Hilliam Penn Lile, March 2001
