The Alternative Minimum Tax (AMT) is an additional tax that certain individuals must pay on top of their regular tax liability. When the original “minimum tax” was enacted in 1969, its purpose was to limit the ability of high-income earners from paying little or no tax by using certain tax breaks. Tax breaks that may trigger the AMT include various itemized deductions, accelerated depreciation, and incentive stock option benefits, among others.
Unfortunately, as many taxpayers have learned in the past few decades, the AMT can hit even middle-class individuals and those who do not take many tax breaks. This problem is further exacerbated by the effects of inflation.
What about Tax Year 2012?
Congress has generally enacted a “fix” or “patch” to prevent non-high-earners from being subject to the AMT in past years. Unfortunately, as it currently stands, Congress has not acted yet for the tax year 2012 Since this is an election year and the government is looking for more ways to increase revenues, there is doubt as to whether the Congress will actually adopt such a “fix”. If it does not, tens of millions of additional taxpayers may face a much higher tax bill because of the AMT. The Congressional Budget Office (CBO) has estimated that the average tax increase for such taxpayers will be $3,900, and some may pay over $8,000 in additional taxes.
If you believe you may be one of the many people subject to the AMT for tax year 2012, you may want to consult with an experienced tax attorney in order to minimize your potential tax liability.
Contract Sherayzen Law Office for AMT Tax Planning
If you believe that you are facing the AMT in the tax year 2012, contact Sherayzen Law Office. Our experienced tax attorneys will analyze your situation and advise you on how shield yourself from over-taxation with proper tax planning pursuant to the Internal Revenue Code provisions.