Tax Experts

How Can a Charitable Deduction Trigger AMT?

By Kevin McCormally, Editorial Director, Kiplinger.com

March 2008

Q. AMT is hitting me for the first time. It seems my 2007 charitable donations are not allowed as deductions. WHY? It makes no sense; I feel like never being charitable again. -- John

Kevin's Answer:

Double check your calculations, because charitable contributions ARE allowed under the alternative minimum tax.

One way big donations can trip you up, though, is if your regular tax bracket is higher than the 26% and 28% AMT rates. In that case, deducting a big charitable contribution could knock your tax bill down more than the same deduction trims your AMT bill. And, as you know, you're always stuck with paying whichever bill is higher.

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