How much money do you make continued....and do you pay the AMT?

[Anonymous]

Just curious about all the people on the "How much money do make" thread. What is your HHI and do you pay the AMT? Our HHI is currently around $190K and we've been paying the AMT for 9 years. Back then our income was $100K (I was SAHM then).

[Anonymous]

AMT depends on much more than just HHI. We used to pull down 265K combined and never paid AMT. (We are down to 140K now and aren't paying it either). But then you'll see people with HHI's much lower who have to pay it.

[Anonymous]

PP, that's what our accountant told us. So this year I did our taxes using turbotax. I even experimented with some of the variables like mortgage interest, charitable giving, removing my income altogether, etc. Each time I was told we owed the AMT. It really is infuriating. My guess is that if you have significant income from investments (we don't) then you don't pay AMT. Any tax attorneys out there with some advice?

[Anonymous]

Yup we sure do pay it!

Our HHI is $315,000

[Anonymous]

Yes, we pay it, although it has not been much of a factor the last few years. The phase out of deductions and exemptions makes it bite less hard.

HHI $750 to 775K, give or take.

I honestly don't get the connection between paying taxes and the claim that somehow rich people feel like they are scraping by because of them. Everybody pays or is supposed to pay taxes.

[Anonymous]

I'm single with three kids, renting and making $250K. I bet I'm going to be paying AMT, right? Always had a mtg payment until now to hide behind.

[Anonymous]

So what does it depend on? We make $200K, rent, and have never had to pay it. ?

[Anonymous]

OP here- Honestly, I really don't mind paying my taxes. What I really resent is the fact that I spend a lot of time keeping track of our donations. This year I've decided to screw the effort. I just donate (clothing and household stuff) left and right and I'm not going to bother keeping receipts and tracking it all. Of course, with monetary donations it's no hassle to keep those receipts and acknowledgements. Also, so many things are advertised as a tax deductible investment blah blah. I'm simplifying my life now and I'm not worrying about minimizing the tax hit because nothing we do seems to affect it anyway. I'm just frustrated that the AMT seems so arbitrary and not fairly applied.

[Anonymous]

we make 480k and pay the damn AMT every time. I hate it.

[Anonymous]

what in the world is an amt? or an hhi?

[Anonymous]

alternative minimum tax

household income

[Anonymous]

Our HHI is 210K, so it's a bit lower than most of the people in this thread. I thought you also had a higher chance of being hit with the AMT if you have more deductions. I had 2, now 3. Had to pay AMT in both cases.

[Anonymous]

7:12 here, I meant Dependents, not Deductions. We also have mortgage interest.

I think the more you deduct, the higher chance you have of being hit with the AMT, because the AMT was designed to prevent the rich for dodging taxes by using too many deductions.

[SAM2]

Anonymous wrote:So what does it depend on? We make $200K, rent, and have never had to pay it. ?

I think PP is right. You can think of AMT as just a secondary way of calculating your taxes that uses a lower tax rate but disallows many of the deductions/credits most people get when calculating your taxes the standard way. You're most likely getting snagged by AMT if you have lots of deductions (eg, big mortgage deduction, state and local tax deductions, large charitable deductions, business expenses, etc).

It's not really an extra/additional tax (although it often feels that way), but rather just an alternative calculation to make sure some people aren't escaping a bare minimum tax because of many large deductions. I recall reading how politicians who wanted to champion tax cuts could cleverly rely on the AMT to protect them from actually having to cut taxes, while still getting credit for making cuts. In other words, they could claim credit for making big cuts to the primary tax rates, but they knew that the AMT would limit those tax cuts and mean that no one was actually paying much less in taxes, so the government budgets could be protected. So if you're feeling the pain of AMT, and you want to blame someone, you really should blame those politicians who promised you tax deductions. They were giving with one hand, and taking away with the other.

[Anonymous]

AMT is basically a flat tax. You figure out your taxes 2 ways - the normal way and the AMT way. Whichever is higher you get to pay! The only deductions that count for us (and most people) is charitable and our mortgage on our principal residence. The one that really irks me is no deduction on property tax which is substantial. You get to be taxed twice on that!