Rest In Pieces, AMT

Taxpayers are getting an eight-year break for the dreaded Alternative Minimum Tax. Here's how to make the most of that time.

(Image credit: N_design)

I would love to have written “peace,” but there is nothing peaceful about the Alternative Minimum Tax (AMT).

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Header Cell - Column 0 Case #1Case #2Case #3
Row 0 - Cell 0 201720182017201820172018
Ordinary Income(wages, social security, pensions, IRA distributions, etc.)$100,000$100,000$200,000$200,000$200,000$200,000
Dividends/Long-Term Capital Gains$200,000$200,000$200,000$200,000$400,000$400,000
Adjusted Gross Income$300,000$300,000$400,000$400,000$600,000$600,000
Deductions$26,258$24,000$33,522$24,000$47,222$24,000
Taxable Income$273,742$276,000$366,478$376,000$552,778$576,000
Row 6 - Cell 0 Row 6 - Cell 1 Row 6 - Cell 2 Row 6 - Cell 3 Row 6 - Cell 4 Row 6 - Cell 5 Row 6 - Cell 6
Federal Tax(Regular + AMT)$44,648$40,459$81,272$66,519$129,648$108,969
AMT Included Above$2,946$-$12,074$-$22,572$-
% decrease in Federal TaxRow 9 - Cell 1 9%Row 9 - Cell 3 18%Row 9 - Cell 5 16%
Row 10 - Cell 0 Row 10 - Cell 1 Row 10 - Cell 2 Row 10 - Cell 3 Row 10 - Cell 4 Row 10 - Cell 5 Row 10 - Cell 6
Marginal Rate - Federal26%12%26%24%28%24%
Effective Rate - Federal16%15%22%18%23%19%

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Brian Vnak, CFP, CPA
Vice President, Integrated Advice, Integrated Advice, Wealth Enhancement Group

Brian Vnak is Vice President, Wealth Enhancement Group, advising clients on income, gift, trust and estate tax issues.