Their total regular tax and total AMT would both drop if they were single.
FORBES: Marriage, Children, Tax Credits, And The Alternative Minimum Tax
And because the AMT denies dependent exemptions, it hits families harder than the childless.
FORBES: Marriage, Children, Tax Credits, And The Alternative Minimum Tax
The alternative minimum tax (AMT) is one of the most-hated features of the tax code.
FORBES: Obama Proposes A Turbo-Charged Alternative Minimum Tax
Exercizing stock options is one of the most common triggers for the AMT, he says.
The only problem is how can you anticipate if the AMT applies to you?
The AMT tends to hit those in coast-hugging wealthy states (read: blue states) more heavily.
Mandel has a hypothetical example to illustrate the damage that the AMT can do.
The AMT can drive up your tax bill much more quickly and arbitrarily than a tax rate increase.
For many individuals, AMT is considerably more important than the endless debates about top tax rates.
That means extra IRA distributions may be taxed at an AMT rate of 26% or 28%.
Also, be wary of investments that generate passive losses--they're often not allowed in AMT.
Without the patch, post-2009 AMT exemption amounts would have plummeted to their 2001 levels.
Another result of the patch can cut down an AMT liability even beyond these exemption figures.
Folks caught in the AMT pay an effective federal gains rate as high as 22%.
He is in the 28% tax bracket in 2011 because he is subject to the AMT.
FORBES: Bush Tax Cuts Saved Romney Almost $1.2 Million in 2011
Reportedly, over 3 million taxpayers will owe the AMT on their 2006 tax return.
After computing your regular and AMT liabilities, the taxpayer must pay the higher of the two.
FORBES: Contrarian Tax Planning: Increasing Income To Take Advantage Of The AMT
The tax code also includes an "AMT exemption, " which phases out as your income increases.
Instituted in 1969 as a way of taxing the rich, the AMT wasn't indexed to inflation.
For most people, AMT relief would offset this, but that's a tricky point to explain.
Permanent AMT repeal (beginning in 2009) is the centerpiece of his sweeping package, introduced last month.
Tax preparation fees, when taken as miscellaneous itemized deductions, are disallowed in the AMT.
FORBES: How to adjust your investing, loan and AMT strategies.
The new Bush compromise proposal calls for reductions in the AMT, but not an outright repeal.
In overly simplistic terms, calculating your AMT liability requires that the regular tax be computed.
You compute regular tax and AMT, and if the AMT is higher, you must pay it.
For 2010 and 2011, many nonrefundable personal credits will be allowed against the AMT.
So becoming a REIT represents a win-win situation for both AMT and investors in the company.
FORBES: REIT Conversion Promises To Deliver Bonanza To American Tower And Shareholders
If you file a paper return, you can use the AMT Assistant tool at IRS.gov.
Commercial return prep programs and IRS e-file software will determine if you owe AMT.
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