mynameisjim
Don't try this at home
- Joined
- Oct 27, 2004
- Posts
- 842
masedogg19 said:Ticket was in the neighborhood of $800. Now we don't have to pay anything. But that $800 is added to my taxable income. So if she flew a lot then it could be a problem because I would be taxed a lot more.
Well I believe that 10% of the highest coach fare is added to your income as imputed income. That means you pay about 30% tax on about 10% of the fare. (24 dollars in tax for this example)
Changing your tax bracket doesn't actually change the tax you pay on every dollar, just those extra dollars. In the tax code it says you pay (random number example) 10% on the first 5,000, 15% on the next 5,000, 20% on the next 5,000. But the first 5,000 you earned is still taxed at just 10%.