One crucial aspect that hasn't been fully addressed is the depreciation deduction for foreign rental property. If you do rent out your Costa Rica property, you can depreciate the building (not the land) over 27.5 years for residential rental property, just like US rental property. However, there's a major catch with foreign property depreciation: depreciation recapture rules still apply when you sell, but you can't use like-kind exchanges (1031 exchanges) to defer the gain since those only work for US property. This means you'll eventually pay ordinary income tax rates (up to 25%) on all the depreciation you claimed, plus capital gains on any appreciation. Also, make sure to keep detailed records of the property's basis in both USD and Costa Rican colones, including any improvements. Currency fluctuations can create additional gains or losses when you eventually sell, and the IRS requires you to track the USD basis for tax purposes. Given your $125k income, if you're planning to rent the property even occasionally, the depreciation deduction could provide meaningful tax benefits in the short term - just be aware of the long-term tax implications when you sell.

Don't forget about the potential impact on your state taxes too! If you're currently a resident of a state with income tax, buying foreign property and spending significant time there could affect your state tax residency status. Some states have very aggressive rules about maintaining residency for tax purposes. If you start spending several months a year in Costa Rica, you might inadvertently trigger a state tax audit where they question whether you're still a bona fide resident. This is especially important if you're in a high-tax state like California or New York. On the flip side, if you're able to establish that you've become a non-resident of your current state (while being careful not to become a resident of another state), you could potentially save on state income taxes on your $125k salary. The key is understanding your current state's rules about what constitutes residency - it's usually based on factors like days present, where your permanent home is located, where you're registered to vote, etc. Some states use a 183-day test, others are more complex. This is another area where the interplay between your remote work situation, time spent at the Costa Rica property, and tax planning could create opportunities or pitfalls depending on how it's structured.

One option that hasn't been fully explored here is restructuring your compensation strategy. Since you can't use Section 127 as a sole owner, consider whether increasing your W-2 wages (while keeping them reasonable) makes sense for your overall tax situation. You'd pay more in payroll taxes, but you'd have more after-tax income to put toward student loans. Another angle - if your business has strong cash flow, you might want to look into whether any of your student loan interest qualifies for the business interest deduction if the education was directly related to your business operations. This is different from the personal student loan interest deduction and has different limitations. Also, don't overlook the possibility of setting up a legitimate education assistance program now with proper documentation, even if you can't use it immediately. If you plan to hire employees within the next couple years, having the framework in place could be valuable. Just make sure any program you establish truly meets the non-discrimination requirements and isn't primarily for your benefit as the owner.

I've been following this discussion and wanted to add something that might be helpful for future planning. While Section 127 won't work for you as a sole owner now, there's an interesting strategy some S-Corp owners use when they're genuinely planning to expand their workforce. You can establish what's called a "cafeteria plan" under Section 125 that includes educational benefits as one component. This is broader than just Section 127 and can potentially include student loan assistance as part of a comprehensive benefits package. The key is that it needs to be part of a legitimate plan to offer benefits to future employees, not just a workaround for the owner. The documentation requirements are pretty strict though - you'd need business projections showing planned hiring, job descriptions for anticipated positions, and a timeline for implementation. If you're audited, the IRS will want to see that this was a genuine business expansion plan, not just a tax avoidance scheme. Another consideration: some states are starting to offer their own student loan repayment assistance programs for small business owners who meet certain criteria. It's worth checking if your state has anything like that, especially if your business is in a field they're trying to encourage (like tech, healthcare, or green energy). The tax landscape for small business owners and education expenses is definitely frustrating, but there may be more options opening up in the coming years as lawmakers recognize the burden on business owners who invested in their own education.

I'm dealing with something similar, but in reverse - my employer is correctly treating my continuing education as non-taxable, but I'm worried they might be doing it wrong since I see so many people having issues like yours. I'm an RN working in pediatric oncology, and my hospital pays for specialized certification courses and conference attendance. They've never included any of this in my W-2, treating it all as working condition fringe benefits. But reading through this thread has me second-guessing whether they're handling it correctly. The education is definitely related to my current position - it's all pediatric oncology-specific training that directly improves my ability to care for my current patient population. But I'm wondering if there are specific documentation requirements I should be aware of to make sure we're both protected if there's ever an audit? Has anyone here had experience with the IRS actually reviewing these types of exclusions? I want to make sure my employer and I are on solid ground, especially since some of these courses can be pretty expensive.

As someone who's been through a similar situation with employer-paid education benefits, I wanted to share what ultimately worked for me. The key is understanding that you have multiple avenues to resolve this, even when HR initially pushes back. First, try approaching your employer one more time, but this time with specific documentation. Print out IRS Publication 15-B, Section 3, which covers working condition fringe benefits for education. Highlight the part that explains education qualifies when it "maintains or improves skills needed in your present work." For RN-to-NP programs, this often applies since you're building upon your existing nursing knowledge base. If your employer still won't budge, you're not stuck. You can file your return showing the W-2 as issued, but then claim the adjustment by filing Form 4852 (Substitute for Form W-2) along with a detailed explanation of why the education qualifies as a non-taxable working condition fringe benefit. Include documentation like your job description, the education program details, and how it relates to your current nursing role. The fact that your employer is paying for this education actually strengthens your case - it suggests they see value in the education for your current position. Keep all documentation about your nursing program and how it enhances your current ICU skills, as this will be important if there are ever any questions. Don't let HR's initial resistance discourage you. Many HR departments aren't well-versed in the nuances of education benefit taxation, especially for healthcare professionals. You have legitimate options to get this resolved correctly.

Has anyone tried using TurboTax to fix this issue? My employer also included my MBA tuition on my W-2, but I was able to exclude it on my tax return using TurboTax's deduction finder. It asked specific questions about my education and determined I could exclude it as a working condition fringe benefit. I'm just nervous about getting audited.

I went through something very similar as a registered nurse pursuing my BSN while working at a hospital. The IRS distinction between "maintaining/improving current job skills" vs "qualifying for a new profession" can be tricky with nursing education. For your NP program, you'll want to focus on how the advanced coursework enhances your current nursing practice - things like pathophysiology, pharmacology, and assessment skills that make you a better RN even if you don't immediately transition to an NP role. If your hospital has a clinical ladder or specialty certifications that benefit from advanced nursing knowledge, document that connection. The questionnaire you mentioned probably asked whether the degree qualifies you for a "new trade or business." The key is how you frame it - emphasize that it's advanced nursing education that improves your current nursing skills, not preparation for a completely different career. Even if you plan to become an NP later, if the coursework enhances your current RN duties, it can still qualify. Don't give up on getting this corrected. Consider escalating beyond your immediate HR contact or requesting a written explanation of their policy. Sometimes a different HR representative will have better understanding of the tax rules.

One trick I learned from my tax guy - if you're 100% certain you don't need a 1095-A and this is just a system error, try entering $0 on line 11 of Form 8962 (Premium Tax Credit form). Sometimes the rejection happens because the system is expecting Form 8962 to be filed, not necessarily because it needs the actual 1095-A data. This worked for my sister who had a similar issue. The return processed normally and she got her refund. Just make sure you're absolutely certain you didn't have marketplace coverage, or this could cause problems later.

I work as a tax preparer and see this exact issue multiple times every season. The root cause is usually a data mismatch between different government systems that don't always communicate properly when people transition between coverage types. Here's what I recommend doing in order of priority: 1. **Contact Ambetter first** - Ask them to send you a summary of your coverage history and confirm whether any of your plans were ever processed through the marketplace. Sometimes agents sign people up for marketplace plans without making it clear. 2. **Check your previous tax returns** - Look at your 2017-2023 returns to see if you ever filed Form 8962 or reported premium tax credits. If you did, there might be leftover flags in the system. 3. **Use the Taxpayer Advocate Service** - If the standard helplines aren't resolving this quickly, contact TAS at 1-877-777-4778. They specialize in resolving these kinds of system errors and can often get things fixed faster than regular customer service. 4. **Document everything** - Keep records of all your calls, reference numbers, and any documentation showing your coverage history. This will be crucial if you need to prove your case later. The good news is that this is a known issue and there are established procedures to resolve it. Don't let it stress you out too much - you will get your refund, it just might take a little longer than usual.