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In April 2002, I paid about $10,000 in under-withheld state taxes for 2001. So this year, as I go to deduct this state tax paid, TurboTax is telling me that I am subject to AMT on the deduction.

My understanding is that had I paid this tax through withholding throughout the year or even as quaterly tax payments in 2001, I would not be subject to AMT. Is this correct? And if so, why am I subject to AMT for paying the same tax in April 2002?... ( addition to the underpayment penalty I paid in April 2002).

Is TurboTax wrong? Or is the tax law doing it to me again?

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