I just read an article on the web about the problem with the AMT and delay causing problems for refunds. I have a question about whether or not the AMT will effect me when I file taxes. How do you know? Are there ANY clear cut answers?
Now, I did research it very well, but do not understand tax laws therefore do not understand the language of the explainations. Any simple formula, ie AGI of ... or you have to have had cashed out stock...
Thanks in advance!
2007-12-03 09:02:44 · 6 answers · asked by tesiemay 2 in Business & Finance ➔ Taxes ➔ United States
That's the question of the week around the country, with all of the publicity it's getting. When it was established in 1969, Congress didn't index it, so the rules now are the same as they were originally, Back then, if you had $100,000 income you were wealthy - now, especially depending on where you live, you might be upper middle class but not wealthy.
There isn't any simple formula - the rules are incredibly complex (thanks, Congress). If your income is under $100K it probably won't hit you - if you're well under that, you should be safe. Even if you are fairly high income, you probably won't get hit unless you have a lot of deductions. The people in most danger of getting hit by it live in very expensive areas of the country, so their salaries are higher and if they own a house with a big mortgage, their deductions are high too. Even having several kids can kick in the AMT.
If your income is below $62,550 on a joint return or $42,500 if you are single or head of household, you won't be affected. If your income is over that but you don't have a lot of deductions, you are probably safe.
The AMT might be in the running for the worst, most complex, tax law ever enacted. Congress has been patching it for several years by raising the income limits where people can be affected, but so far this year has failed to pass that legislation.
2007-12-03 09:26:12 · answer #1 · answered by Judy 7 · 2⤊ 0⤋
Yes, there is a guide that will assist you.
In the instructions to Form 1040, you will find the "Worksheet to See if You Should Fill in Form 6251." (Forn 6251 is for the AMT). You'll have to use the 2006 instructions since the 2007 forms have not been printed yet. You can get a copy at www.irs.gov.
There is also an online version of the form at the same website if you would rather use that.
2007-12-03 22:11:22 · answer #2 · answered by The Shadow 6 · 0⤊ 0⤋
Don't listen to Robert, I have clients who made well less than 100K and were subject to AMT. Appox. 20 million more people will be subject to it this year. If you have a high number of exemptions and dependent credits you can definitely be subject to AMT. I attached a shortcut to the AMT Assistant from the IRS website. Go through and answer the questions.....but remember this is for 2006. But it should give you a better idea of how you could be affected by AMT.
2007-12-03 17:31:02 · answer #3 · answered by tscgmc 2 · 0⤊ 1⤋
do you itemize your deductions?
if so, will you be deducting a significant amount of taxes (real estate, state & local, sales taxes, etc)?
will you be deducting medical expenses or miscellaneous itemized deductions?
if the answer to the second and third questions are no, you will likely not be subject to the AMT.
it's far too complicated to be discussed here - go to www.irs.gov and search for the AMT publication for more info.
2007-12-03 17:06:43 · answer #4 · answered by Anonymous · 0⤊ 0⤋
No one does yet because Congress is still screwing around with "fixing" the AMT.
2007-12-03 17:57:47 · answer #5 · answered by npk 7 · 0⤊ 1⤋
go to IRS.gov for the full story.
unless u earn over 100thousand a year u don't have a worry.
2007-12-03 17:13:26 · answer #6 · answered by Anonymous · 0⤊ 2⤋