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Face up to the AMT in ’18

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in Small Business Tax

Although the new Tax Cuts and Jobs Act (TCJA) reduces exposure to the alternative minimum tax (AMT) for millions of taxpayers for 2018-2025, it doesn’t provide complete protection.

Strategy: Make a quick midyear analysis. If you expect to avoid the AMT in 2018, you can continue merrily on your way.

Conversely, if you figure you’ll be hit by the AMT, make moves between now and year-end to minimize the damage.

Here’s the whole story: The AMT calculation runs parallel to your regular income tax calculation at tax return time. There are five basic steps for computing AMT liability.

1. Figure out your taxable income for regular tax purposes.

2. Add designated “tax preference items” to this figure and make the other adjustments required by law (see box below). If you need help, consult with your tax pro.

3. Subtract a special exemption amount based on your filing status. This exemption amount is reduced for high-in...(register to read more)

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