As you review your income tax situation at midyear, consider your exposure to the alternative minimum tax (AMT). The alternative minimum tax involves a separate tax calculation that disallows many of the deductions and credits used to calculate regular income tax. If you have high levels of deductions or exemptions, or if you exercise incentive stock options this year, it’s...
In a recent income statistics bulletin, the IRS reported that the alternative minimum tax (AMT) affected a record 4.25 million tax returns and collected $30.48 billion in taxes during tax year 2011. The AMT was created years ago to ensure that high-income taxpayers could not escape all taxes through the use of deductions and credits. The recent report indicated that...
Have you ever wondered if the Alternative Minimum Tax applies to you? You may have to pay this tax if your income is above a certain amount. The AMT attempts to ensure that some individuals who claim certain tax benefits pay a minimum amount of tax. Here are some things from the IRS that you should know about AMT: 1....
Tags: Alternative Minimum TaxAMT
Category: Taxes
What’s your alternative minimum tax (AMT) preference? Though you might prefer to not think about the AMT, certain income and deductions, known as preference items, affect the way the tax will apply to you. Those amounts, along with others called “adjustments,” are added to or subtracted from the income shown on your tax return to arrive at your AMT taxable...
Many folks have asked us lately, “What is the AMT (altertnative Minimum Tax)?” Congress created the AMT to ensure that wealthier taxpayers, who often have the kinds of income and deductions that qualify for preferential tax treatment, would pay at least a minimum amount of tax. Congress also wrote exemptions into the law, so that middle-income taxpayers wouldn’t be subject...
Tags: AMTtax planning
Category: Taxes
Do you need to concern yourself with the AMT? You do if you have a lot of dependents or if you claim substantial itemized deductions. You may also be subject to the AMT if you realized hefty capital gains during the year or exercised incentive stock options. Claiming certain tax credits might trigger the AMT as well. And if you...