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The firm where I summered (V20) treats reimbursements for bar expenses as taxable income. I recently heard from a friend that his firm (V5) does not report those payments as taxable income. I'm surprised by this difference and am interested to know which approach is more common.

Yes, they are considered taxable income. Hence why employers can't give employees 'gifts' in the form of, say, tennis lessons.

we asked about this in my FIT class on whether it'd be included as an itemized deduction for Education Required by Employer or by Law and the answer is no, because 1) you're not "in the profession" yet when you take the bar and 2) even if you've started your job, the IRS has said that just because you're already doing the work, doesn't mean that you've necessarily met the minimum educational requirements of your trade or business to be considered "in the profession"

so CLE credits can be deducted, but not bar expenses.

Yea the amount your employer reimburses you gets added as income to your year end tax return and you get taxed on it. Fucking sucks. More reason to go for that cheaper costing Themis/free iPad combo or whatever there is.

Must vary by firm whether they include them on your W2. Mine didn't. Not saying that they should or should not have.

Yugihoe wrote:Yea the amount your employer reimburses you gets added as income to your year end tax return and you get taxed on it. Fucking sucks. More reason to go for that cheaper costing Themis/free iPad combo or whatever there is.

Sucks a lot less than paying your own bar expenses