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Ups and downs of AMT exemptions

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in Small Business Tax

The government continues to put Band-Aids on the AMT problem. For instance, over the past few years it has bumped up the exemption amounts available to individual filers. However, as things stand now, the exemption amounts will actually decrease for 2007 to the levels that applied for 2000.

The chart below shows the progression from 2000 through 2007.
                                          2001-            2003-

Filing status  2000        2002             2005           2006         2007

Joint filers   $45,000    $49,000        $58,000     $62,550    $45,000

Single filers $33,750   $35,750        $40,250     $42,500    $33,750

Tip: To make matters worse, the exemption amounts phase out for high-income taxpayers. The exemption is reduced by 25 cents for each dollar of AMT income above $150,000 for joint filers; $112,500 for single filers. Those figures have not been adjusted for inflation.

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