AMT tax law gives special treatment to some kinds of income
and allows special deductions and credits for some kinds of expenses.
Taxpayers, who benefit from certain tax laws, may have a
minimum amount of tax added, through the alternative minimum tax (AMT) You may
have to pay the AMT if your taxable income for regular taxes combined with
certain adjustments and tax preference items is more than a certain amount.
The most common adjustments and tax preference which can trigger
the AMT tax include:
·
Addition of personal exemptions
·
Addition of the standard deduction (if claimed)
·
Addition of itemized deductions claimed for
state and local taxes, certain interest, most miscellaneous deductions, and
part of medical expenses
·
Subtraction of any refund of state and local taxes
included in grass income
·
Changes to accelerated depreciation of certain
property
·
Difference between gain or loss on the sale of
property reported for regular tax purposes and ATM purposes
·
Addition of certain income from incentive stock
options
·
Change in certain passive activity loss
deductions
·
Addition of certain depletion that is more than
the adjustment bases of the property
·
Addition of part of the deduction for certain
intangible drilling costs
·
Addition of tax-exempt interest on certain
private activity bonds
The exemption amount is $48,450 ($74,450 if married filing
jointly, or qualifying widow(er); $37,225 if married filing separately. Meaning, the AMT Tax is no longer just for
the wealthy tax payers. Everyday day,
hard working taxpayers can trigger this tax, unknowingly. (This tax law could change for 2012)
To learn more about the AMT tax, read the Instructions for Form 6251 or speak with
your Tax Professional
