I used TaxAct like I have been for years to file my 2010 taxes. The only thing that has substantially changed this past year is that my income has gone up a rather healthy amount. I did not incur any capital gains, but actually have a lot of carry-forward long-term capital losses still.I itemize, primarily because the amount of state income tax that I pay ($13,000+ this past year) exceeds my standard deduction (single). I did not have medical expenses that met my AGI floor and minimally deducted some charitable contributions. I do not have a mortgage that I can deduct. I had a trivial amount of 1099 income ($650) which I wrote off entirely against some expenses. I did have some employee expenses for licensing, subscriptions, etc. but those ended up not making it onto my summary screen, I presume due to the AMT.This year I ended up having to pay nearly another $1000 of AMT which resulted in my having to pay the IRS a bit of money.What else would I need to provide people here so they could give me an idea of why I ended up incurring AMT this year? I had thought this only affected people with "large" deductions relative to their income.
What else would I need to provide people here so they could give me an idea of why I ended up incurring AMT this year? More than I'd care to give in a public setting. Have you looked at Form 6251? That should tell you what's going on and, more importantly, alert you to some sort of error.PhilRule Your Retirement Home Fool
I did have some employee expenses for licensing, subscriptions, etc. but those ended up not making it onto my summary screen, I presume due to the AMT. Only the amount over 2% of your income is a Schedule A deduction. Unless the costs are significant, they won't result in an actual deduction.
More than I'd care to give in a public setting. Have you looked at Form 6251? That should tell you what's going on and, more importantly, alert you to some sort of error.I figured as much. Thanks, that's a good place for me to get started. At first glance it appears my state taxes are what did me in this year. I've never been in this tax bracket before so this is all new to me.
All your state income taxes get added back into your AGI, and AMT taxes refigured on that amount. If you have any depreciation, a portion of that (probably) gets added back in. And you add back in all your exemption amounts.AMT affects LOTS of people--even if it's just jumping through the hoops to see if you have to fill out the form to see if you have to pay. Not fun.Kathleen
All of your taxes are not deductible for AMT purposes, so they get added back into income on Form 6251. So both your state income tax and your property tax are lost as deductions.You also mentioned employee business expenses. Take a look at Schedule A, near the bottom. If there's anything on line 27, that amount is also not deductible for AMT.I'm guessing it's those two items that put you into AMT territory. In some higher-tax states, like CA and NY, it's pretty hard to avoid AMT once your income gets high enough.--Peter
Thanks, I did not have enough employee expenses to make a difference this year due to the 2% AGI floor. However looking more closely at my return it appears my state income taxes did me in. Guess I'm now considered "wealthy" since I'm paying AMT. I'm aware of the lack of indexing to inflation and that it generates enough revenue for the government that serious efforts to reform AMT have always fallen flat.
Lurker1999 writes (in part):I'm aware of the lack of indexing to inflation and that it generates enough revenue for the government that serious efforts to reform AMT have always fallen flat.I reply:Although that's technically accurate, I think the reality is slightly different. As I understand matters, although the AMT as it has always appeared in the tax code lacks indexing, Congress has routinely increased the AMT exemption amount in a manner that at least roughly parallels indexing.But really, I think AMT is as close as we're likely to come to a flat tax. --Bob
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |