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Subject Author Date
AMT - how do I plan ahead? Gil Faver 12-19-2007
Posted by Gil Faver on December 19, 2007, 11:12 am
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 Living in a high state income tax state, I am occasionally subject to the
AMT. How do I do a rough calculation to see if it makes sense to pay my Q4
state income tax estimated payment by December 31, rather than January 15?

This year my taxable income will go up, which suggests I can pay a greater
amount of state income tax without getting hit by the AMT. On the other
hand, if I wait until January 15 for my Q4 payment, next year's state tax
payments will be extra high, with next year's estimated state payments all
being increased based on 2007 taxable income.

Is there a rule of thumb or quick calculation? The IRS AMT "assistant"
seems to want you to have your tax form completely filled out before it can
"assist".

thanks.


Posted by Alan on December 19, 2007, 2:04 pm
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 Gil Faver wrote:
> Living in a high state income tax state, I am occasionally subject to the
> AMT. How do I do a rough calculation to see if it makes sense to pay my Q4
> state income tax estimated payment by December 31, rather than January 15?
>
> This year my taxable income will go up, which suggests I can pay a greater
> amount of state income tax without getting hit by the AMT. On the other
> hand, if I wait until January 15 for my Q4 payment, next year's state tax
> payments will be extra high, with next year's estimated state payments all
> being increased based on 2007 taxable income.
>
> Is there a rule of thumb or quick calculation? The IRS AMT "assistant"
> seems to want you to have your tax form completely filled out before it can
> "assist".
>
> thanks.
>
I'm not aware of any online calculator or rule of thumb that
doesn't require a draft 1040. In addition, without any
Congressional action and GWB signature, the AMT exemptions that
existed in 2006 will revert back to tax year 2000 levels in 2007
and certain tax credits will not be allowed against AMT. In other
words, it's a mess.

All that said, here are the AMT exemptions for 2005, 2006 and
2007 as of this moment in time. Who knows where Congress where
set the new level.

http://www.taxingsubjects.com/Archives/issue21/art10.html


Posted by Alan on December 19, 2007, 6:28 pm
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Alan wrote:
> Gil Faver wrote:
>> Living in a high state income tax state, I am occasionally subject to
>> the AMT. How do I do a rough calculation to see if it makes sense to
>> pay my Q4 state income tax estimated payment by December 31, rather
>> than January 15?
>>
>> This year my taxable income will go up, which suggests I can pay a
>> greater amount of state income tax without getting hit by the AMT. On
>> the other hand, if I wait until January 15 for my Q4 payment, next
>> year's state tax payments will be extra high, with next year's
>> estimated state payments all being increased based on 2007 taxable
>> income.
>>
>> Is there a rule of thumb or quick calculation? The IRS AMT
>> "assistant" seems to want you to have your tax form completely filled
>> out before it can "assist".
>>
>> thanks.
> I'm not aware of any online calculator or rule of thumb that doesn't
> require a draft 1040. In addition, without any Congressional action and
> GWB signature, the AMT exemptions that existed in 2006 will revert back
> to tax year 2000 levels in 2007 and certain tax credits will not be
> allowed against AMT. In other words, it's a mess.
>
> All that said, here are the AMT exemptions for 2005, 2006 and 2007 as of
> this moment in time. Who knows where Congress where set the new level.
>
> http://www.taxingsubjects.com/Archives/issue21/art10.html
>
This afternoon the House passed the Senate version of AMT relief.
GWB said he will sign it.

http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.3996.EAS:


Posted by Gil Faver on December 23, 2007, 4:42 pm
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> Living in a high state income tax state, I am occasionally subject to the
> AMT. How do I do a rough calculation to see if it makes sense to pay my
> Q4 state income tax estimated payment by December 31, rather than January
> 15?
>
> This year my taxable income will go up, which suggests I can pay a greater
> amount of state income tax without getting hit by the AMT. On the other
> hand, if I wait until January 15 for my Q4 payment, next year's state tax
> payments will be extra high, with next year's estimated state payments all
> being increased based on 2007 taxable income.
>
> Is there a rule of thumb or quick calculation? The IRS AMT "assistant"
> seems to want you to have your tax form completely filled out before it
> can "assist".
>
> thanks.

thanks for the replies. Now, to answer my own question, here is a site that
will give you a free, rough estimate.

http://personal.fidelity.com/planning/tax/content/amt_overview.shtml.cvsr?imm_pid=1&immid=00110&imm_eid=e13877&buf=999999

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