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Message
re: alternative minimum tax
Posted on 12/12/12 at 9:32 pm to weaglebeagle
Posted on 12/12/12 at 9:32 pm to weaglebeagle
Just realized I abbreviated it as ATM instead of AMT. Duh... 
Yeah, I'm mad about this issue. 
Yeah, I'm mad about this issue. 
0
Posted on 12/12/12 at 9:36 pm to Poodlebrain
I'm still confused on all this.
Wife and I fall in-between the $44k and $76k AGI taking into account our itemized deductions (charity, mortgage interest, etc.) and a lifetime learning credit.
Wife and I fall in-between the $44k and $76k AGI taking into account our itemized deductions (charity, mortgage interest, etc.) and a lifetime learning credit.
Posted on 12/12/12 at 9:41 pm to Golfer
Golfer, your AGI is determined BEFORE you subtract any deductions or personal exemptions. Your AGI is simply defined as all of your income, whether it be wages, interest, dividends, social security, etc. (Although SOME, NONE, or up to 85% of your social security may be included in AGI, depending on your filing status and wages. Yeah, I know. That is probably as clear as mud. 
I edited this to also explain that your lifetime learning credit is a non-refundable credit that is calculated AFTER your AGI is totaled up. And that lifetime learning credit is only worth .20 on every $1.00 up to $10K. This credit is only used to mitigate any taxes you owe on your TAXABLE income. Poodlebrain can probably explain it better than I can. He's a CPA, I believe. I'm not a CPA.
I edited this to also explain that your lifetime learning credit is a non-refundable credit that is calculated AFTER your AGI is totaled up. And that lifetime learning credit is only worth .20 on every $1.00 up to $10K. This credit is only used to mitigate any taxes you owe on your TAXABLE income. Poodlebrain can probably explain it better than I can. He's a CPA, I believe. I'm not a CPA.
This post was edited on 12/12/12 at 9:49 pm
Posted on 12/12/12 at 9:47 pm to Poodlebrain
Poodlebrain, does this mean that people already expecting to pay the AMT for 2012 will owe even more money?
That would suck to owe a bunch of money out of pocket in a few months or worse yet be penalized for not withholding enough.
That would suck to owe a bunch of money out of pocket in a few months or worse yet be penalized for not withholding enough.
Posted on 12/12/12 at 9:48 pm to BFIV
quote:
That is probably as clear as mud
Earned Income
Business expenses etc (for AGI deductions)
AGI
Itemized Deductions and Credits (from AGI deductions)
Taxable Income
This post was edited on 12/12/12 at 9:50 pm
Posted on 12/12/12 at 9:55 pm to reb13
It's been a long day, I've been thinking of AMT as AGI.
Posted on 12/12/12 at 9:56 pm to Bayou Tiger
quote:
Poodlebrain, does this mean that people already expecting to pay the AMT for 2012 will owe even more money?
Depends on whether you were expecting to pay AMT on income above the 76K dollar threshold or the 45K dollar threshold. AMT is calculated as an increasing percentage as your income increases above the threshold. If you were planning on paying AMT on last year's threshold AND there is no patch to remove the 45K dollar threshold, then you will be paying AMT based on the lower threshold and you and I and the rest of us are going to be absolutely stunned and infuriated with our income tax bill this season. Not trying to answer for Poodlebrain. When he sees this thread, I hope he will weigh in, too.
Posted on 12/12/12 at 10:00 pm to lnomm34
quote:
He said adjusted gross income, so after deductions, right?
Nope. Tax terminology is confusing, I admit. AFTER deductions and credits, your income is called Modified Adjusted Gross Income (MAGI). That's a whole different critter than Adjusted Gross Income (AGI).
Posted on 12/12/12 at 10:10 pm to BFIV
Okay. Thanks for the warning. I pay enough taxes as it is, so that would be total crap. My withholding is based on prior year AMT thresholds.
Posted on 12/12/12 at 10:33 pm to Bayou Tiger
I have a relatively simple question.
Can I deduct health insurance premiums? Are they considered medical expenses?
Can I deduct health insurance premiums? Are they considered medical expenses?
Posted on 12/12/12 at 10:48 pm to Tmacelroy12
quote:
Can I deduct health insurance premiums? Are they considered medical expenses?
Yes, as long as they are not reimbursed and surpass 7.5% of your AGI.
Posted on 12/12/12 at 11:12 pm to reb13
quote:
Can I deduct health insurance premiums? Are they considered medical expenses?
Yes, as long as they are not reimbursed and surpass 7.5% of your AGI.
I believe that 7.5% threshold has now been increased to 10% for next year. More bad news for itemizers.
Posted on 12/13/12 at 2:00 am to wegotdatwood
It is a solution to a problem that was fixed with the Tax Reform Act of 1986, broadening the tax base to prevent abusive deductions. It was created when taxpayers could claim deductions for expenses that are no longer deductible, and marginal tax rates were significantly higher. With the reduction in tax rates the spread betweeen the AMT rates and regular rates is so small that it has the unintended consequence of capturing taxpayers who have the misfortune of living in states with high property values and high state income tax rates who lose many tax benefits designed to assist people of their income levels.
Congress should either do away with the AMT, or convert the entire tax code to the AMT.
Congress should either do away with the AMT, or convert the entire tax code to the AMT.
Posted on 12/13/12 at 12:28 pm to BFIV
quote:
but this will be for the 2013 tax year. not 2012. so in essence they have a whole year to make this retro before it will effect anyone
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 patched the AMT for the 2010 and 2011 tax years. As with recent AMT patch legislation, personal credits are also allowed against the AMT. In the Senate, S. 3521 would patch the AMT for the 2012 and 2013 tax years for an estimated revenue loss of $132.2 billion. Roughly 34 million taxpayers will be subject to the AMT in 2012 absent congressional action.
Posted on 12/13/12 at 12:41 pm to Golfer
quote:
I'm still confused on all this.
Wife and I fall in-between the $44k and $76k AGI taking into account our itemized deductions (charity, mortgage interest, etc.) and a lifetime learning credit.
Depends on how much your deductions actually are for your mortgage / charity. If you have a really expensive house for your income, AMT will get triggered. Also stock options can trigger AMT.
Posted on 12/13/12 at 12:49 pm to BACONisMEATcandy
quote:
. In the Senate, S. 3521 would patch the AMT for the 2012 and 2013 tax years for an estimated revenue loss of $132.2 billion.
So, either the top 2% of income earners will fork over 100 billion in tax revenue, or the middle class will shoulder the load?
Gee, I wonder how this will play out?
Anybody seen a buy one, get one on KY at Walgreen's or CVS? Looks like my solidly middle class income is about to get arse raped.
Posted on 12/13/12 at 1:05 pm to Sheep
quote:
In the Senate, S. 3521 would patch the AMT for the 2012 and 2013 tax years for an estimated revenue loss of $132.2 billion.
Is there a comparable piece of legislation yet introduced in the House?
Posted on 12/13/12 at 7:16 pm to Sheep
quote:
So, either the top 2% of income earners will fork over 100 billion in tax revenue, or the middle class will shoulder the load?
Why does the "middle class" need a tax break from a tax that was passed under the premise of a tax on the rich?
The problem is that "the rich" don't make up enough of our population to solve our spending problem
Posted on 12/13/12 at 7:20 pm to BACONisMEATcandy
quote:
The problem is that "the rich" don't make up enough of our population to solve our spending problem
I'm not rich but that's not the problem. It's the draining leaches of society who are the problem.
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