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O/T Tax Question AMT

Discussion in 'Uncategorized Threads' started by miketmx, Mar 16, 2008.

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  1. miketmx

    miketmx Well-Known Member

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    I don't understand AMT Alternative Minimum Tax. If I fill out a F6251 and there is a tax, is it added to the regular tax from the tax table or is it an alternative?? Should I fill out two Form 1116s one with standard deduction and regular tax and a 2nd Form 1116 without standard deduction and with the AMT??
     
  2. dynapro

    dynapro TS Member

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    your AMT amount is an addition to your regular tax. Yes, you submit both forms.
     
  3. bigdogtx

    bigdogtx Well-Known Member

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    Congratulations on being RICH! You worked hard and deserve an Additional Tax. Don't you just love our government??
     
  4. miketmx

    miketmx Well-Known Member

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    Thanks for the answer; I wish I was rich but I'm in the wrong group. If I were employed I could get a healthy tax exemption by filing a 2555EZ but I am unemployed and living off of a fixed pension. Something seems wrong about this at least to my way of thinking!
     
  5. Jim101

    Jim101 Active Member

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    Mike see a tax professional. I believe the AMT only kicks in at a certain income level.

    Edit: link is to a CBO site that explains the AMT.

    This is a small excerpt from the site.

    Technically, the AMT is not an "alternative" tax. It is defined as the addition to regular income taxes, equal to the amount, if any, by which AMT liability exceeds regular tax liability (after applying appropriate credits). Taxpayers who potentially owe AMT must recalculate taxable income as defined by the AMT, apply alternative tax rates, allow for credits and other factors, and compare the resulting tentative AMT liability against regular tax liability. Even though the AMT is technically the excess of AMT over regular tax liability, taxpayers effectively calculate their taxes under two systems and pay the higher of the two liabilities











    Jim
     
  6. miketmx

    miketmx Well-Known Member

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    Jim, thanks very much for the website link. The tax guide that came with my 1040 package had a $ 22,500 threshold for Married filing separately and the new I6251 pdf file on the IRS website says it was changed to a whopping $ 33,125 for Married Filing Separately. In either case that hardly seems like a lot of income to qualify for the AMT.
     
  7. pdq

    pdq Member

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    The AMT was originally conceived to tax the very rich, they said out of "fairness". Brighten up -- according to them, you are rich!!!

    Pete
     
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