Anyone know a good online place to ask tax questions without spending a fortune?

[Xithras]

Yes, I'm a last minute filer, and it's biting me this year. I have my taxes just about finished, but I have one item that I can't quite figure out how to file. I'm filing via the online Turbotax software, and I've found their "free community" support to be just about useless, and can't really afford to drop $40 so that their "tax expert" can answer it for me.

Anyone know of any free (or cheap, as in under $15) places that can give good, reliable answers?

And just in case we have any tax gurus here: My wife is a teacher and has gone back to school to upgrade her degree. She is employed by the local school district, which operates under the authority of our county Office of Education. Last year she qualified for a one time $6,000 continuing education grant (officially a stipend) from the OoE, to help offset the $11,000 she spent on schooling. Because she's an employee of the school district and not the county, the OoE sent her a 1099-MISC this year, listing the money under Box 7 - NonEmployee Compensation.

Turbotax seems convinced that the 1099-MISC means that it's self-employment income, and wants us to file the full Schedule C, requiring us to pay self-employment taxes, social security taxes, and everything else for it. That just doesn't seem correct to me. It's a reimbursement from the county to defray educational expenses for a degree upgrade that she was REQUIRED to obtain for her job!

[indypaul]

1. You might try

www.irs.gov and check out Publication 17 - Teachers, Work
related education. Pages 192,193.

[Xithras]

2. That's totally unrelated.

I'm fully aware of the deductibility of educational expenses related to a trade, and her educational expenses are definitely a qualifying work-related expense. We deducted it last year too.

My problem is that she received a $6000 stipend from the county to offset some of that cost this year, and I have no clue how this is supposed to be reported. Income? Gift? Reimbursement from the government?

Nobody seems to have any clue. Even the OoE was useless; "Call your accountant, we can't help you with that." That would be nice...if I had an accountant anymore.

The real damned joy with all of this is that my wife just got pinkslipped from her teaching job. $26,000 in new debt to "upgrade" her degree and keep her job, and they cut her loose anyway. But hey, I guess we should be happy that they kicked us $6000 back. Ah well, that's a topic for another discussion...

[indypaul]

3. Publication 970 Tax Benefits for Education

may offer you a solution at same site www.irs.gov n/t

[Kali]

4. I have no idea

but 1099 says income to me. If it offset some other expense then that expense is the deduction against the income of the stipend, right?

[siligut]

5. Husband volunteers every year to do taxes for the less advantaged through United Way

http://liveunited.org/our-work/earned-income-tax-credit-and-free-tax-prep?gclid=CMyNz6XBpqgCFUgbQgodohdQHQ Find the office closest to you and ask them?

[Love Bug]

6. I'm a tax preparer and I did one of those today

Believe it or not, when the employer uses a 1099-MISC Box 7 instead of a W-2 you have to file the income on a Schedule C. It sucks but that's because the employer didn't take out any taxes or FICA. Because she isn't an employee of the county they have her on their books as an independent contractor, thus, Box 7.

Did you get a 1098-T from the school so you can claim a deduction for the tuition that wasn't reimbursed?

[Xithras]

7. In the end, I did NOT have to file the Schedule C

I ended up just breaking down this morning and enduring the two hour hold time to talk to an IRS agent. While the wait sucked, the guy was incredibly helpful once I got him on the phone.

We did have to pay taxes on it, but because it's not a recurring event and she performed no actual work for it, we were able to list it on our Schedule A as "Other Income". The guy grilled me over and over about whether she did any work for the Office of Education to "earn" the award, but it eventually came down to this: Irrespective of their actual intentions, there was legally no connection between the money and any activity on her part...at least as it related to her employment. The Office of Education was not her employer, and she did not perform any actions for them to "earn" the money. She would have gone to school and incurred the tuition expense whether or not the county had offered her the money, because the educational need was imposed by her employer (and the county wasn't her employer). It was, from a legal standpoint, a "gift" unconnected to her employment.

It would have been far better if the county had routed the money through the school district, so it could have been documented as a tax-free reimbursement of an employer-imposed educational expense, but this was an acceptable alternative, and it reduced the taxes I owed on the "gift" by about 75% I went from owing a couple thousand dollars to the state and federal governments, to only owing about $250 this year. :party:

[Love Bug]

8. Oh, good. I wondered if there was some way around it!

I'm glad it reduced your taxes owed, too. I'll have to run this example by my boss to see what he thinks. Sometimes employers file things in strange or incorrect ways and we have to get creative -- but not too creative -- in the way we file so the client gets the maximum benefit.