How to save on AMT tax?

[Anonymous]

OK, I wanted to get free opinion........

On my AMT tax form (6051 form), it said to add my gross income from 1040 line 41 + the state income tax + property tax.....this is crazy. Is it suppose to do subtraction of income/property tax from the income?

How to reduce AMT tax overall? We both are w-2s, no other income, only thing could be deducted is mortgage interest and property tax, which only saved a little. We maxed our 401 K. We did refinance by the end of year, could we deduct the county tax and transfer tax from closing cost of HUD 1?

I am using Turbo tax, I could use a CRP, but our tax is relatively simple, no investment, no second house, no education saving, not sure if it is worth it over turbotax software.

Thanks in advance.

[Anonymous]

That's the million dollar question!! I understand there is no way to get around the amt. If anything has made it clear to me that we need to save every penny we can and invest. You get screwed on wage based earnings.

[Anonymous]

The purpose of amt, sort of by design, is to be something you can't get out of.

[Anonymous]

Ways to not hit the AMT

1) Make less money.
2) In some cases, have more children
3) In some cases, donate more to qualified tax deductible organizations

None will give you more cash in hand than paying the AMT.

[Anonymous]

Anonymous wrote:The purpose of amt, sort of by design, is to be something you can't get out of.

+1

[Anonymous]

And the Bush tax cuts were designed to sound bigger than they were by relying on the AMT to make up the difference for a lot of taxpayers.

[Anonymous]

The amt only hits a few very high income w2 2 income earners. But if it hit you you're kind of screwed. Have a bunch of kids or donate lots to charity. That's about it.

[Anonymous]

You have to generate your income without a w-2- investments, cap gains, etc. If you get a wage and a w-2, its just a simple formula for taxing. This is because you can not legally significantly reduce your taxable income. Now the big boys who make their money without a w-2 can do reduce their taxable income....there are a lot of ways to avoid taxes, but you have to have real money. These are the guys who donate money and have influence over lawmakers....so their taxes are always lower as a % of income vs a wage earner. PS no republicans or democrats are talking about reducing taxes from the people who earn a wage.

[Anonymous]

Anonymous wrote:The amt only hits a few very high income w2 2 income earners. But if it hit you you're kind of screwed. Have a bunch of kids or donate lots to charity. That's about it.

More than 4 million people, actually.

[Anonymous]

Amt is triggered for high income folks with "excessive deductions". The solutions therefore are make more, make less, deduct less.

[Anonymous]

In calculating the AMT, you cannot take itemized deductions for state and local income tax, real estate taxes and personal property taxes, even though these are deductible on a regular return. I think for most people affected by AMT, the only deductions are mortgage interest and charitatable contributions.

[Anonymous]

Write to your congressperson - hopefully you do not live in DC where you do not reallu have representation.

[Anonymous]

Get a job with deferred compensation, like real rich people do.

Only suckers work for W-2 wages.

[Anonymous]

Anonymous wrote:Get a job with deferred compensation, like real rich people do.

Only suckers work for W-2 wages.

The rich let their money work for them, not the other way around.

[Anonymous]

Anonymous wrote:Ways to not hit the AMT

1) Make less money.
2) In some cases, have more children
3) In some cases, donate more to qualified tax deductible organizations

None will give you more cash in hand than paying the AMT.

4) get paid in cash