Our advice: Make the best of a bad situation. It’s possible to reduce your AMT fallout by prepaying certain expenses or postponing income. Or, you might use a reverse strategy (outlined at the end of this article) to beat the system. The worst thing is to do nothing now and take your lumps at tax-return time.
How the AMT works: Each year, you’re required to run parallel calculations of your regular income-tax liability and your AMT liability. In effect, you pay whichever tax is higher.
5 steps for figuring the tax
Here are the five basic steps for computing your AMT liability:
1. Figure out your taxable income for regular tax purpos...(register to read more)
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