Preferences and Adjustments
Positive and negative AMT adjustments are added or subtracted from regular taxable income to determine the "taxable income after AMT adjustments." Tax preference items are then added to get your AMTI. The following is a list of AMT adjustments:
Adjustments for AMT (deductions not allowed):
- Standard deduction and personal exemptions
- Certain itemized deductions
- Mortgage interest
- Medical expenses
- Miscellaneous deductions
- Investment interest
- MACRS depreciation
- Basis adjustment affects AMT gain or loss
- Incentive stock options (ISO)
- Mining exploration and development costs
- Circulation costs
- Long-term contracts
- Research and experimental procedures
- Passive tax-shelter farm losses
- Passive losses from non-farming activities
Certain tax preference items must be added back into taxable income after AMT adjustments to determine the AMTI. These primary items include the following:
AMT Preference Items (Must Know These):
- Tax-exempt interest on private-activity municipal bonds
- Percentage Depletion / Excess intangible drilling costs (IDC)
- Depreciation (ACRS/MACRS)
- Exercise of an Incentive Stock Option (Bargain Element)
Exclusion Items Vs. Deferral Items
TaxesShould you worry about the AMT? Even if you're subject to it, there are exemptions and strategies for reducing your tax bill.
TaxesLearn how refundable AMT credits can help you save on taxes, AMT bills and more.
TaxesThat depends on the type of stock option you have. A rundown of the tax treatment for statutory and nonstatutory, or non-qualified, options.
TaxesNot taking the standard deduction this year could save you hundreds of dollars.
TaxesThis strategy of moving your tax deductable payments and donations to the following year could mean hundreds more on your return.
RetirementFiling your taxes during retirement can be just as time consuming as when you were employed. We have some tips to help you out.
TaxesInvestment expenses can be deducted by those who meet three main criteria. Here's what they are and how they work.
TaxesTaxable income is the net of gross income and allowable deductions.
TaxesGetting organized well before the deadline will curb your frustration and your tax liability.
TaxesThe amount of money you save by paying your mortgage off quickly will far exceed any benefit from the mortgage interest tax deduction.