First of all, people who are subject to the AMT Tax should know about it BEFORE the year ends. This is not a tax that you want to sneak up on you, as it does with millions of taxpayers. Once this tax kicks in, there is very little you can do to change or lower it.
In our opinion, avoiding the AMT tax takes tax planning, and knowing exactly what tax situation you are in for the year. If you have a tax on Line 45 of your Form 1040, you may want to consult with a tax professional. If you believe that you may run into trouble in the next tax year, you can consult with the tax professional on ways to avoid or lower the tax.
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Five Facts to Know about AMT
The Alternative Minimum Tax may apply to you if your income is above a certain amount. Here are five facts the IRS wants you to know about the AMT:
1. You may have to pay the tax if your taxable income plus certain adjustments is more than the AMT exemption amount for your filing status.
2. The 2012 AMT exemption amounts for each filing status are:
- Single and Head of Household = $50,600;
- Married Filing Joint and Qualifying Widow(er) = $78,750; and
- Married Filing Separate = $39,375.
3. AMT attempts to ensure that some individuals and corporations who claim certain exclusions, tax deductions and tax credits pay a minimum amount of tax.
4. You should use IRS e-file to prepare and file your tax return. You figure AMT using different rules than those you use to figure your regular income tax. IRS e-file software will determine if you owe AMT, and if you do, it will figure the tax for you.
5. If you file a paper return, use the AMT Assistant tool on IRS.gov to find out if you may need to pay the tax.
Visit IRS.gov for more information about AMT. You should also check Form 6251, Alternative Minimum Tax – Individuals and its instructions. Both are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Additional IRS Resources:
