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No. of Recommendations: 4
FWIW, I think AMT has to go; I don't mind paying taxes, I just think it's ridiculous how AMT complicates estimating your taxes.

You realize this effect of paying MORE than your apparent marginal rate on additional income has nothing to do with AMT? There's a nasty spot for Social Security recipients around the break between the 10% and 15% brackets, where you get an effective rate of something like 30% on additional income. And those people aren't anywhere near having AMT as an issue.

I wouldn't want to get rid of AMT - is serves a useful purpose of limiting how many tax benefits you can pile onto a single return. But it does need to be tweaked to get it back to that original purpose and not just hitting everyone with income in a certain range.

As far as estimating your taxes - it actually makes that job simpler. If you know you will be in AMT, you don't need to worry about estimating a number of deductions. No deductions for taxes. No deduction for your employee business expenses. Higher threshold for medical expenses. No personal exemption, so no worrying about whether your college age kid is a dependent or not. Almost a flat tax rate - the only brackets are 26% and 28% - so you can just use 28% for planning and be done with it.

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