By Joy Taylor and Sandra Block
From Kiplinger’s Personal Finance
Question: My employer offers a pet insurance benefit. Can I pay for this with pretax wages?
Answer: No. Unlike employer-paid health insurance for workers, which isn’t included in taxable wages, the value of employer-paid pet insurance is taxable income. Most employers who offer pet insurance benefits don’t subsidize the cost, and employees who opt in pay their share through post-tax payroll deductions.
Question: Can I use 529 funds to pay for a college student’s studies abroad?
Answer: In many cases, yes. A 529 plan can be used for any college that participates in the U.S. federal student aid program. If a student is enrolled in a U.S. college and chooses to study abroad through the school’s program for a semester or two, the study-abroad program will be 529-eligible, provided the U.S. college is eligible and the college accepts the study-abroad credits.
If the child decides to enroll in a non-U.S. college for their full college education, then that foreign university must participate in the U.S. federal student aid program. And, believe it or not, many foreign colleges do participate and would therefore qualify as eligible schools for 529 purposes. Tuition, books, fees, and room and board can be paid with 529 funds.
Question: I own a residential rental property and put a new roof on it last month. Can I fully deduct the cost of the roof on Schedule E of my 2024 Form 1040?
Answer: No, but you can depreciate it over 27.5 years. The new roof you installed is treated as an improvement to the rental property and is treated separately from the underlying property for depreciation purposes. This means the roof’s cost is depreciated over 27.5 years, the same as residential rental property. The beginning depreciation year would be 2024, the year you put on the new roof.
Question: How much time do I have to fix a mistake on a tax return?
Answer: You generally have up to three years from the date you filed your original return (or two years from the date you paid any tax due) to file an amended return.
If you simply made a math error, the Internal Revenue Service (IRS) will correct it. However, if you failed to report taxable income, which may occur if you overlooked a Form 1099 from one of your brokerage accounts, you should file the amended return and pay the additional tax owed as soon as possible to reduce interest and potential penalties. If filing an amended return will increase the size of your refund, you should file as soon as possible to speed delivery of your payment.
About 3 million taxpayers file amended returns each year, and the process has become easier since 2020, when the IRS began accepting electronic submissions of Form 1040X, the document used to amend a federal tax return. Previously, taxpayers had to file the form on paper.
©2024 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.
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