I want to go on a volunteer program that costs about 3000 dollars. The brochure says it's completely tax deductable, but my parents say that for them, they're in a "higher tax bracket" and it probably wouldnt be deductable. What the "h" does that mean and is it true? Can something be deductable for one person and not for another or is this just their way of saying they dont want me going?
2006-08-26 16:35:16 · 6 answers · asked by Little Red 2 in Business & Finance ➔ Taxes ➔ United States
um, someone asked for more info, all I know is that the volunteer program is well known (Cross Cultural Solutions) and that my parents tell me to check the highest income box on all my college applications.
2006-08-26 17:16:45 · update #1
It depends on the type of deduction. If your parents are subject to the Alternative Minimum Tax (AMT), which is an additional tax beyond the regular income tax and is designed to keep upper income people from getting rich, they start losing deductions for their children and for local and state taxes they pay. However, the AMT does not limit charitable contributions.
As the AMT is quite confusing, you cannot just assume that some brochure has taken the time to figure out the tax effects for people subject to it. Certain parts of the tax code can subject you to more AMT even though the original item itself is not subject to the AMT.
I think you'd really need to consult a tax professional about this. It could end up costing your parents a bundle.
2006-08-26 16:51:00 · answer #1 · answered by szydkids 5 · 0⤊ 0⤋
First of all there may be a question about this volunteer program being deductible to any one. You would need to explain more before any one can give you an answer on that aspect. As has been stated several tax deductions are "phased out" based on education level or have little effect because of AMT. (I won't try to explain AMT but it is triggered by large income levels with excessive deductions.) You might find it educational to research why the program thinks the cost would be deductible. Only by knowing the bases of the deduction can you tell if it is "phased out" . Now you may have another problem. Will your parents be willing to tell you what their income level is?
2006-08-26 16:53:05 · answer #2 · answered by ? 6 · 0⤊ 0⤋
it's most definetly true about deductions limited as income increases
the IRS "phases out" deduction for people over certain incomes to make sure that everyone pays some tax, so it could be deductible for you but not them
2006-08-26 16:40:04 · answer #3 · answered by Dwight D J 5 · 0⤊ 0⤋
Anyone can take the deduction if they itemise their taxes. If they take standard deduction they won't get it. Gross income has nothing to do with it.
2006-08-26 18:10:44 · answer #4 · answered by nursesr4evr 7 · 0⤊ 0⤋
if you dont trust your parents, are you going to trust the rest of us.
2006-08-26 16:41:30 · answer #5 · answered by peregrine003 2 · 0⤊ 1⤋
no
2006-08-26 16:40:37 · answer #6 · answered by jedi214 2 · 0⤊ 1⤋