Despite the recent talk in Congress about alternative minimum tax (AMT) reform (see page 3), the "stealth tax" is still expected to hit millions of unsuspecting taxpayers this year ... maybe even you.
Strategy: Take matters into your own hands. Quickly estimate your potential AMT liability for 2005 using our work sheet on page 2. It will show if you need to "push" or "pull" at the end of the year.
How the AMT works
Each year, you're required to run parallel calculations showing your regular income tax liability and your AMT liability. Then, you pay the higher tax.
Computing AMT liability involves five basic steps:
1. Figure your taxable income for regular tax purposes.
2. Add designated "tax preference items" to this figure and make other technical adjustments, such as the addition of personal exemptions and some itemized deductions.
3. Subtract a special AMT exemption amount based on your filin...(register to read more)