Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

I received income in the form of student loan repayment in…

Customer Question
Hello, I received income...

Hello, I received income in the form of student loan repayment in 2014 for a sum of $20,000 and 2015 for the same amount. I did not pay taxes on that loan repayment in those years. I also received similar payments in 2015 & 2016 however taxes were paid for both of those years. Due to the hospital I am employed by being bought by a larger national hospital chain they will no longer honor the final payment scheduled for 2018 ($100,000 total over the contract) and have now asked me to pay taxes on the untaxed amount by the end of 2018. Now that I am at a higher tax bracket and will be paying more for taxes my question is 1) Is that legal, i.e. its been at least two years since taxes were paid and 2) if this is correct tax law is there anyway to pay the taxes based on my 2014 and 2015 wages as this would be much less (I was still in residency in 2014) and was lower pain in 2015 than I am currently.

Accountant's Assistant: When we are ready I'll take you to the appropriate web page.

Ok

Accountant's Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?

Does the accountant know contract law by chance?

Submitted: 7 months ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 6 minutes by:
1/5/2018
Tax Professional: Lev, Tax Advisor replied 7 months ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,278
Experience: Taxes, Immigration, Labor Relations
Verified

1) Is that legal, i.e. its been at least two years since taxes were paid and

The issue here is that you are cash based taxpayer - as most of us are - and income is recognized when it is constructively received.
See here

https://www.law.cornell.edu/cfr/text/26/1.451-2

For income tax purposes, the doctrine of constructive receipt is used to determine when the taxpayer should include into gross income certain amounts.

So as that income was received during 2014 and following years - it MUST be reported on these years tax returns.
If the company recorded that as a loan to you in order to avoid taxable income - that is not correct and that what the new employer is trying to correct.
2) if this is correct tax law is there anyway to pay the taxes based on my 2014 and 2015 wages as this would be much less (I was still in residency in 2014) and was lower pain in 2015 than I am currently.

Th correct way - to adjust your income for each of these prior tax years and make corrected W2 forms - so you will be able to amend all your prior tax returns.

That will likely trigger additional penalties for you and for your employer because of unpaid employment taxes.

Ask Your Own Tax Question
Customer reply replied 7 months ago
I have a written contract that shows not only the disbursement amounts but the amortization schedule when they will be paid back. So the student loan reimbursement was actually a loan from the original hospital to me, where not only am I paying taxes on that loan (in 2016 and 2017) but also paying the original hospital interest. when reviewing my W2 at the end of the year I was taxed on 22,600 when they added this to income, and then took this away as deductions. for example each 2 week pay period they would add $854.12 into my gross pay, and then take the $854.12 out as a deduction totaling roughly $22,600 at the end of the year. So am I paying taxes on a loan?
Customer reply replied 7 months ago
Sorry would love to talk but I just put my twins down to bed
Tax Professional: Lev, Tax Advisor replied 7 months ago

The loan itself is NOT taxable income.

However - what makes me to worry - you did not ever mention in your original statement that was a loan...

I just worry why?
That must be a true loan - with full understanding and expectations of both parties that loan will be paid back.

So if you agree that was a bona fide loan - you just need to pay back that loan - and will NOT report that amount as your taxable income.

Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,278
33,278 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
You answered that I could amend my tax return to allow for
You answered that I could amend my tax return to allow for 32,000 benefit for filing married joint. will I receive refund or discontine payment since I am on an installment repayment plan. If I amend … read more
James Daloisio
James Daloisio
Attorney
Doctoral Degree
561 satisfied customers
Impact of tax changes on filing amended returns... Client
Impact of tax changes on filing amended returns... Client filed a 2016 tax return on time in 2017. If the tax laws change significantly, which laws apply when amended returns are filed... the tax laws… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,648 satisfied customers
I received SS disability payment in 2016 that covered from
Hi Charles, I received SS disability payment in 2016 that covered from July 2014 - October 2016. I had been receiving LTD benefits and had to repay all of 2014 (July - December), all of 2015 (January … read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,278 satisfied customers
I am a dentist working for a 501c3 organization in an
I am a dentist working for a 501c3 organization in an underserved area. Part of my employment agreement was loan repayment. The I received my regular W2 and a 1099misc for the loan repayment amount, w… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,278 satisfied customers
Can you answer a few questions that I have regarding back
Can you answer a few questions that I have regarding back taxes for years 2012 through 2015? Also can I claim just for 2015 then set some sort of payment plan with the IRS for 2012 through 2014?… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
I retired on 5/29/2015 after recovery of a head surgery. I
I retired on 5/29/2015 after recovery of a head surgery. I have since, unexpectedly, received 3 W-2 forms: one from my routine salary (including a few hundreds accumulated vacation hours); one from a … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
Does a taxpayer have to file in a timely fashion to receive
does a taxpayer have to file in a timely fashion to receive the earned income credit I am filing for someone for tax years 2013 and 2014… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
I will be working with non profit hospital as a physician
I will be working with non profit hospital as a physician and providing hospitalist services in a rural town (Zip Code 16346). I believe this is an undeserved area. I have been asked by the potential … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
, I came to the US 10 years ago with a (then) 10 year old
Hi, I came to the US 10 years ago with a (then) 10 year old life insurance. The life insurance matured last year paying me 20,000 USD according to contract. 70% of this amount was made up by my own co… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,278 satisfied customers
In 2014 my employer payed relocation (through moving
In 2014 my employer payed for my relocation (through moving service) and also provided tax assistance (pain tax on relocation coverage). In 2015 I quit my job and I had to pay back 50% of relocation a… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,278 satisfied customers
, i just have tax related question. In 2013 , I put into my business from personal X amo
hi, i just have tax related question. In 2013 , I put into my business from personal X amount of $, let us assume 100,000 from my personal account, and I have taken out 50,000 , I did it as money tran… read more
Mark D
Mark D
Enrolled Agent
Master's Degree
1,338 satisfied customers
Hi Lev, one more query about the income & expenses on my lifetime
Hi Lev, one more query about the income & expenses on my lifetime contract for personal services. I had to pay back some of this money (about $ 4500) to Medicare in 2014. Would I take that as a discou… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,278 satisfied customers
I entered in an agreement with a hospital controlled by a charitable
I entered in an agreement with a hospital controlled by a charitable organization (501(c)3) by which the hospital paid off a large portion of my outstanding medical student loans (originally borrowed … read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
I am an employeed physican and have fulfilled a 3 year commitment
I am an employeed physican and have fulfilled a 3 year commitment to qualify for total forgiveness of a student loan bonus of 50,000. I've read that this would qualify for a tax free forgiveness given… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,278 satisfied customers
I have a 1099-misc with 40000 reported on line 7. This was
I have a 1099-misc with 40000 reported on line 7. This was from the local hospital and was paid to my student loan holder. I do not work for the hospital. how should this be reported?… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,278 satisfied customers
I have a S corp and am filing old returns. One year there
I have a S corp and am filing old returns. One year there wasn't much business, so my 1 employee worked 1/2 time on my personal investment property. I paid the business for his time. The other 1/2 of … read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,278 satisfied customers
My company (a California LLC taxed as a partnership) has been
My company (a California LLC taxed as a partnership) has been paying monthly interest and principal to me on a loan made since January 2009. The interest is deductable to the company and income to me … read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
I am participating in a Loan repayment program by working ...
I am participating in a Loan repayment program by working as a physician in an underserved area of Virginia. I was told that I would not have to pay income tax on the money that I am making by partici… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,278 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x