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5

The Alternative Minimum Tax is called "minimum" for a reason. It only affects you if it ends up being more than your tax burden without it. If, as you say in the comments, your Alternative Minimum Tax is "significantly less than my regular tax," then you won't owe any AMT, and there generally is no need to attach Form 6251 to your tax return. The Form ...


5

There are a couple of issues here: In case of underpayment of the State tax, the extra you need to pay is deductible in the following year. In case of overpayment, you got 1K AMT credit, which you can use. The assumption that the marginal rate equals exactly the AMT rate for such low amounts is unreasonable, and very small percentage of people pay AMT year ...


5

This is a tax, not a deposit. So no, you will not get it back. You will be able to use your AMT credit, under certain conditions, see the instructions to form 8801. Obviously, the actual value of the credit depends on your other items of income, and you may end up never using the whole credit.


4

You don't pay taxes on the discount ($1->$2) twice. You actually have a separate cost basis for your shares in the normal tax system versus AMT. Google 'AMT cost basis' and you'll see examples like this one. As you point out, paying AMT due to exercising incentive stock options (ISOs) means you have a carry-forward credit that can be applied against the ...


4

I think you might be overthinking this. In general, the alternative minimum tax (AMT) due (if any) is not due as of the date(s) when the events that triggered the AMT occurred and there is no need to worry about the interest and penalties that you must pay for not paying the AMT instantly when the triggering event(s) occurred. Indeed, the AMT is not ...


4

Much like if you had a large capital gain with no withholding, you should determine if you'll be at risk of an underpayment. Generally this means you end up owing more than $1000 at tax filing time, though there are some safe harbors. Unfortunately that is more difficult with AMT and its interplay with the regular income tax system. But you should be able to ...


3

AMT was invented to target people that have high special deductions or other extreme cases, and would be able to avoid normal taxes with that. Very rarely will you have to pay AMT if you are an employee, your income comes through a W2, and you don't have large deductions from other sources. You can just ignore it until your situation changes gravely.


2

When you have too many deductions--especially high property taxes--this can trigger AMT, eliminating some or all of your ability to deduct them. This is affecting an increasing percentage of taxpayers. Step 1: Understand your marginal tax rate under AMT The first thing you should do is understand your situation using tax software. Increase and decrease ...


2

The money they retrieve from their savings account is not taxed. However, the interest that they earn on those accounts are taxed. When you put money into your savings account from a pay check, it technically has already been taxed.


2

To repeat a standard disclaimer but this is something you should approach a tax consultant with. You already seem to have an estimate of $1.2M (which I'm not sure how you have). The best reference sites are still approximations. Also note, that you pay the higher of AMT and your usual income tax. As for possibly selling your stocks, you could look into ...


2

Around $32,600 of discount/spread in exercised ISOs would give you a roughly equivalent total tax between the regular and AMT systems. With these numbers, under the regular tax system you'd pay $22,679 in federal income tax. Your tentative minimum tax (TMT) would be $22,672. If your ISO spread went up to $32,700, your TMT would go up to $22,698, and since ...


1

First you compute your exemption amount using the regular rule, using your AMTI. Then, if you qualify as one of “certain children under age 24”, then you compute the minimum exemption as earned income + 7400. AMTI may be equal to earned income for you, but it certainly isn’t for many people.


1

Most of the time, AMT does not generate a credit to be carried forward. It does in cases where the AMT was triggered by deferred taxes, such as the special treatment of ISOs (incentive stock options). When you owe AMT due to such items, you should file Form 8801 each year to compute the credit being carried. In your specific question, it sounds like the ...


1

The AMT exemption rose from $54,300 in 2017, to $70,300 in 2018. As long as your income didn’t rise dramatically, nor did your itemized deductions, I’d think it’s safe to say that you would not be subject to AMT in ‘18 if not subject to it in ‘17. That said, I’m a big fan of having tax software do the math for you, eliminate the chance of math errors, and ...


1

I think you may find that this is neither as simple, nor as wise, as you may think. ISOs, or Incentive Stock Options, are granted to employees to convince them to work harder, longer, for a lower salary, to take on extra risk, stay with a company for longer, or as a way to reward individuals who have made particular contributions to the company. They ...


1

Since posting my question, I have consulted with a tax accountant. He has confirmed that yes, health insurance premiums are deductible for those who are self-employed, even under the AMT - plus, if you buy into a high-deductible health plan (HDHP) with a Health Savings Account (HSA), you can deduct both the premiums and the HSA contributions. One caveat is ...


1

CAVEAT: I'm not a tax professional or pretend to be one. AMT is really complicated and you may be best of working with a professional If the stock is tradable, it's probably your best bet to sell it right away and pay regular income tax on it. Your numbers put you right smack into the AMT phase-out area, where the incremental AMT rate is a whopping 35%. ...


1

The general rule is that you need to include the state tax refund only to the extent that you received a benefit from the deduction. When you do your 2018 taxes, you have to recompute your 2017 taxes (both regular tax and AMT) with the state tax deduction reduced by the refund amount. If the recomputed tax is greater than the tax that was paid, you must ...


1

I've bought ISO stock over they years -- in NYSE traded companies. Every time I've done so, they've done what's called "sell-to-cover". And the gubmint treats the difference between FMV and purchase price as if it's part of your salary. And for me, they've sold some stock extra to pay estimated taxes. So, if I got this right... 20,000 shares at $3 costs ...


1

You do a "same day" exercise of 12000 shares. That nets your $24000. With the $24000 you can exercise the remaining 8000 shares. Alternatively you could exercise 12000 shares for $36000 and immediately sell 7200 shares to recover your exercise price. Then you use the remaining 4800 share to pay the exercise price of the remaining 8000 options. Both ...


1

Technically yes, in most cases you'll probably get all the AMT you pay for exercising in-the-money incentive stock options (ISOs) credited back to you. Practically, however, inflation could significantly reduce the value of the money when you get it back. Remember you can only recover the differential between regular income tax and the tentative minimum tax (...


1

In the question you cited, I assumed immediate exercise, that is why you understood that I was talking about 30 days after grant. I actually mentioned that assumption in the answer. Sec. 83(b) doesn't apply to options, because options are not assets per se. It only applies to restricted stocks. So the 30 days start counting from the time you get the ...


1

Kindof, yes. You can claim AMT credit, but your overall tax cannot go below the AMT calculation. Suppose this year you accumulated $60K AMT credit. Next year you don't exercise ISO options, and your regular tax is 28K. AMT for that year is ~15K. You can apply $13K. But you're mixing up State and Federal AMT, these are unrelated things. You need to ...


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