Tax Guru-Ker$tetter Letter

Saturday, February 08, 2003

AMT Sneaking Up On More Taxpayers

This is very true. There are more and more cases where I have actually had to back off claiming legitimate deductions on clients' returns in order to reduce or eliminate the AMT and achieve an overall lower tax bite. That's not a problem for IRS because they aren't in the business of telling people that they didn't claim enough deductions.

One of the more extreme examples of the AMT kicking in was with a client who went from being a Schedule C self employed independent contractor (IC) to a W-2 employee. By moving the exact same amount of his unreimbursed expenses from Sch. C to Sch. A, the AMT kicked in, for several thousand dollars of additional tax than if he had remained as an IC. How does that make any sense?

Reform AMT is still the most vocal and active group working for a change in this insidious tax.

KMK
- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 2/08/2003 06:06:00 PM Send this post: