what is the maximum amount a parent can give a child for college and still be tax deductible? This child will be living in the home and be a deduction on the parent's income tax....I assume there would be no changes in the rest of the dependence tax issues, but correct me if I'm wrong
2007-01-13 10:23:09 · 3 answers · asked by Ford Prefect 7 in Business & Finance ➔ Taxes ➔ United States
i found it....max $4000 for me
http://taxes.about.com/od/deductionscredits/qt/tuitionfeesded.htm
2007-01-13 10:35:31 · update #1
There is no "maximum"
Parents can pay tuition of $10,000 and ALL of it is used to calculate the Lifetime Learning Credit, which is 20% of the amount.
Depending on Mom & Dad's income, I'd rather have 20% of $10K or $2000 TAX CREDIT, than a DEDUCTION of $4,000, which saves only $1000 in taxes at the 25% tax bracket!
BTW, there is a BIG difference if Mom&Dad GIVE you $5000 versus them Paying the Tuition bill directly! Consult a tax advisor!
WealthBuilder
2007-01-13 12:20:03 · answer #1 · answered by WealthBuilder 4 · 1⤊ 0⤋
Check the IRS's web site. They will give you all the information you will need to know when it comes to itemizing deductions. Since these things generally change from year to year, its always best to reveiw the new tax laws before filing.
2007-01-13 18:28:01 · answer #2 · answered by Scottee25 4 · 0⤊ 0⤋
There shouldn't be a max as long as you have receipts. It will probably vary from state to state. Best to ask your tax professional.
2007-01-13 18:27:55 · answer #3 · answered by been_there_done_that 5 · 0⤊ 0⤋