Please elaborate. I was under the impression all high income earners are subjected to AMT. how does making too much avoid AMT? I am obviously missing something and brief googling is not giving me the right answers. Thanks
Paid it last two years in full attendinghood, to the tune of between $1500 and $2000. Â Scared to death of what it will look like once my mortgage is paid off.
AMT sets a floor on your tax rate, designed to ensure that high earners don't end up paying no taxes due to having lots of deductions. I pay more in taxes than I would under the AMT floor, therefore I am technically not subject to AMT. Hope that explains it.
AMT (alternative minimum tax) I believe tends to put the minimum around the mid- to high-20s for a ways. Therefore the lower incomes won't hit it.
Once you're in 39.6%, it's going to be very hard to get that many deductions to lower your effective tax rate that far to trigger it.
On the other hand, if you're in 33% or maybe 35%, you're more likely to be in the window to hit it. We'll probably hit it next year since this year we seem to have been just barely below it.
Yep, I believe I've been hit by the AMT every year that I've worked. Would love to accelerate out of it at some point. Seems like most people that live in a high tax state like I do get hit with AMT (I live in NYC).
I was really surprised I paid AMT this year - only a few hundred bucks, but still. I live in NY, so high state taxes, this is what I think put me in the AMT category. I don't have mortgage interest to deduct. I'm not a super high earner and maxed 2 x pre-tax retirement accounts too. Oh well.
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