Many will escape AMT for added year

Lower Your Taxes - Big Time! : Wealth-Building, Tax Reduction Secrets from an IRS Insider When her clients get hit with the [tag]alternative minimum tax[/tag], [tag]St. Petersburg[/tag] [tag]CPA[/tag] Celia Hall says some of them respond: “I don’t want that alternative.” Unfortunately for them, the [tag]AMT[/tag] isn’t optional. If your income tax calculated under the AMT is higher than the tax calculated the regular way, you pay the AMT amount. More than 3-million people paid the tax last tax year and an additional 15-million would have been affected in 2006 if Congress hadn’t stepped in this month to save their wallets.

The underlying problem is that taxpayers’ incomes have risen more than the AMT exemption – the AMT version of the standard deduction. As a result, the AMT snares more people every year. For 2006, anyone with income higher than that exemption – $42,500 single or $62,550 (married filing jointly) – becomes a potential AMT candidate.When calculating tax under AMT, you lose [tag]personal exemptions[/tag] and certain[tag] itemized deductions[/tag], including those for taxes and medical expenses. [tag]Floridians[/tag] are less affected than residents of most states because they don’t have a state income tax to deduct on their federal returns.

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