AMT Exemption Amounts for the Tax Year 2011
The Alternative Minimum Tax (the “AMT”) attempts to ensure that anyone who benefits from certain tax advantages pays at least a minimum amount of tax. Congress created the AMT in 1969, targeting higher-income taxpayers who could claim so many deductions they owed little or no income tax. The AMT provides an alternative set of rules for calculating your income tax. In general, these rules should determine the minimum amount of tax that someone with your income should be required to pay. If your regular tax falls below this minimum, you have to make up the difference by paying alternative minimum tax.
Unfortunately, because the AMT is not indexed for inflation, a growing number of middle-income taxpayers are discovering they are subject to the AMT.
You may have to pay the AMT if your taxable income for regular tax purposes, plus any adjustments and preference items that apply to you, are more than the AMT exemption amount. Congress sets the AMT exemption amounts are by law for each filing status.
For tax year 2011, Congress raised the AMT exemption amounts to the following levels:
$74,450 for a married couple filing a joint return and qualifying widows and widowers;
$48,450 for singles and heads of household;
$37,225 for a married person filing separately.
Moreover, the minimum AMT exemption amount for a child whose unearned income is taxed at the parents’ tax rate has increased to $6,800 for 2011.
Contact Sherayzen Law Office for Tax Planning Advice
If you are potentially facing the AMT, contact Sherayzen Law Office for tax planning advice. Our experienced tax firm will review the facts of your case and identify the available strategies to make sure that you do not overpay federal taxes.