What's the Lowest Income AMT can Kick in ?

[54regcab]

What is the minimum income you have to make before the AMT can become a factor?

[hegemony]

it is a function of deductions not just income.

[54regcab]

What is the *worst case* senerio? Obviously nobody making $50 will even have to think about AMT, but when incomes hit around 6 figures I imagine it starts becoming a concern...

I've heard a lot of stink about it in the news recently with tax season and all but how many people making under 6 figures does the AMT actually snare?

[hegemony]

http://www.bankrate.com/brm/itax/tips/20010412a.asp

 

the above discussion references 2004 numbers but should give a good idea of what is involved for 2005.

[54regcab]

$58,000 taxable income (quoted from linked article) plus $15,900 standard deduction = $73,900 before AMT can become a factor for married couples assuming they owe no tax under standard tax rules.

I'm thinking 6 figures+ before anybody actually gets snared by AMT.

[hegemony]

$58,000 taxable income (quoted from linked article) plus $15,900 standard deduction = $73,900 before AMT can become a factor for married couples assuming they owe no tax under standard tax rules.

I'm thinking 6 figures+ before anybody actually gets snared by AMT.

we will not be subject to it for 2005. 74K is not that much these days if both work.

[hurricanesfans27]

$58,000 taxable income (quoted from linked article) plus $15,900 standard deduction = $73,900 before AMT can become a factor for married couples assuming they owe no tax under standard tax rules.

I'm thinking 6 figures+ before anybody actually gets snared by AMT.

we will not be subject to it for 2005. 74K is not that much these days if both work.

 

 

I was close this year due to my rental properties had lots of deductions

[miked0801]

Yeah, I may be in for it myself this year. Finger's crossed...

[tressa425]

I'm a bit confused about the whole AMT thing. I read the link to the bankrate.com article, and it would seem to indicate that I would be 'snared' by it. What does this mean? My W-2 wages for 2005 (after taking out 401k) were $72K. I don't have a home (so no interest deductions), have no kids (no dependent deductions), and feel like I already pay an absurd amount of taxes. Does the AMT mean I'll pay more??

[zx10 guy]

From what I understand of it, no you wouldn't. AMT only affects those that itemize and have a lot of deductions. I don't do my own taxes as I have a CPA that helps me with it. I've asked her the past couple of years about it and she said I was not in danger of getting snared. But I'm started to get nervous every year this comes up. I paid out $13,400 in interest on my first mortgage on the house. The HELOC I'm guessing is another $3k. Then you add in property taxes and I have a lot of deductions just on my home alone.

[tressa425]

From what I understand of it, no you wouldn't. AMT only affects those that itemize and have a lot of deductions. I don't do my own taxes as I have a CPA that helps me with it. I've asked her the past couple of years about it and she said I was not in danger of getting snared. But I'm started to get nervous every year this comes up. I paid out $13,400 in interest on my first mortgage on the house. The HELOC I'm guessing is another $3k. Then you add in property taxes and I have a lot of deductions just on my home alone.

 

Thanks - that's a relief. I wasn't sure if it only served to counteract the deductions or if it could increase my taxes as well. Every year when I do my taxes I can't believe how much I'm paying between state (both CT and NY, this year I think I'll have to file NJ as well) and federal. Over $20K this year And yes, I know I should be thankful that I have a high income, but there are times when I feel like I pay more to taxes than anything else!

[miked0801]

Don't worry until you are able to literally deduct all your income. I am here due to rental/business interest costs and my 2 kiddy tax deductions. I claimed 12 on my W2 and will still get a refund if I don't get AMT'd...