grabiner wrote:you may eventually be able to recover the AMT in a future year, so it isn't a complete loss. If your AMT is due to non-timing items (deductions disallowed under the AMT), you cannot take a credit. But if it is due to timing items (income or deductions recognized in a different year under the AMT and regular rules), then you can claim a credit for this year's AMT in a future year in which your tax under the AMT is less than under the regular rules.
This is your current year refundable credit. Enter the result here and on your 2012 Form 1040, line 71
dickenjb wrote:Think of it as a badge of honor - it means you make enough to pay AMT. (But not enough to NOT pay AMT).
grabiner wrote:Is the AMT due to timing item (such as depreciation)? I wouldn't expect AMT in your situation, but if you lost $5000 on the rental property according to the regular tax rules, and gained $20,000 according to the AMT rules, that might be the reason you are paying AMT.
Calm Man wrote:I just did my taxes and I will pay AMT for the first time in many years. The reason? Well, by throwing in various numbers I can see that as I INCREASE income, my AMT goes down (of course the total tax goes up). So the culprit was that I earned a fair amount LESS in 2012. It seems when you are at or around the 33% marginal bracket and have a reasonable amount of deductions and exemptions, you get hit with it. In essence, AMT is 28% x AGI - $3500 once over 175K. But at taxable incomes around 200K, the marginal rate is 33% and this is where the disparities begin. My only deductions are 2 exemptions and NJ state income tax (plus charity which doesn't count),. Those get completely obliterated.
jcnelsn1 wrote:I am basically a wage earner not doing anything unique or extraordinary to reduce my taxes under the regular system. I do not think I am the person the AMT originally was designed to affect.
randomwalk wrote:jcnelsn1 wrote:I am basically a wage earner not doing anything unique or extraordinary to reduce my taxes under the regular system. I do not think I am the person the AMT originally was designed to affect.
I think that's true. We get hit hard with AMT because we are blessed with generous salaries and pay pretty significant state income (on our wage income, which is our only income) and property taxes (on our one and only residence), neither of which is a particularly exotic itemized deduction or sophisticated tax avoidance technique.
jcnelsn1 wrote:I did some projections and it looks like I will owe about $5,000 of AMT for 2012. I am using the standard deduction. 33% bracket federal, 4.2% state. Vast majority of my income is from wages... I have 5 exemptions and I am thinking that is what is getting me hit with AMT. Other than giving away a couple of kids , anything I can do to avoid AMT going forward? Thanks
jcnelsn1 wrote:I have 5 exemptions and I am thinking that is what is getting me hit with AMT. Other than giving away a couple of kids , anything I can do to avoid AMT going forward? Thanks
I do not think I am the person the AMT originally was designed to affect.
Actually, it is often better to increase your income to avoid AMT. The higher marginal tax rates for ordinary income will increase the regular tax faster than the AMT tax.randomwalk wrote:1. Earn less money.
2. Pay more interest on your mortgage.
3. Give more to charity.
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