"Gene E. Utterback, EA" <eagent[at]alliancetax.com> writes:
- quote -

Presumably, Jim was talking about using TurboTax, from
Intuit (maker of Quicken). As far as I know, all of
the Tax prep programs go through the whole AMT calculation,
though in order to do the calculations, it sometimes asks
you for information that you wouldn't need if you weren't
paying AMT and might not have handy (ie. what percentage
of a muni bond fund's interest qualifies), etc.

- quote -

Yup, and, again, all the tax prep programs include that.

- quote -

And regardless of whether you pay AMT or not, you still have
to calculate your AGI anyway, so it's easy enough to know,
at that time, whether you can make a Roth contribution or not.
(And if not, you still can make a contribution to a traditional
IRA, though it might be non-deductible).

- quote -

Blech...


- quote -

And a quick plea, folks, please do this! For some help
in figuring out how to post so that your post is most
easily read by others, please read the following page:
<http://www.greenend.org.uk/rjk/2000/06/14/quotingI keep that link in my .sig. It's not my page, but it
is as good an explanation, with nice visuals, as I know
of.

--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

"Jim" <noreplysoccer[at]hotmail.com> wrote in message
news:b7cb2d49.0407021046.5602ba7b[at]posting.google.com...
- quote -

<<SNIPPED A LOT!!!> > > A final, interesting, note - many tax professionals incorrectly
calculate
- quote -

quicken has nothing to do with AMT. Quicken isn't much more than an
electronic check register; it certainly isn't a tax preparation program.
IRS Form 6251 calculates AMT - you can get this from at www.irs.gov, just
follow the links to forms.

Having to pay AMT does not directly disqualify you from making a ROTH
contribution - it isn't your AMT, its your AGI - adjusted gross income -
that limits your ROTH contribution.

Quite honestly, short of going through the actual calculations and doing
some tax planning I'm not aware of any short cut that will help you
determine the applicability of AMT to your situation. Though your being
subject to it in a prior year is usually a pretty good indication that you
will likely have to live with it in later years. Generally, once AMT kicks
in it usually hangs around until the triggers have stopped.

Roth contributions are tied to your AGI and are phased out as your AGI
increases, subject to your marital status.

Good luck,
Gene E. Utterback, EA

"Gene E. Utterback, EA" <eagent[at]alliancetax.com> wrote in message news:<2kb6icF91stU1[at]uni-berlin.de> ...
- quote -

Assume I know little about quicken, how would I see this form?

if one "qualifies" for AMT does that disqualify them from a Roth IRA
for that tax year?

Thank You


======================================= MODERATOR'S COMMENT:
Please trim the post to which you respond.

"Gene E. Utterback, EA" <eagent[at]alliancetax.com> wrote in message news:<2kb6icF91stU1[at]uni-berlin.de> ...
- quote -

Assume I know little about quicken, how would I see this form?

if one "qualifies" for AMT does that disqualify them from a Roth IRA
for that tax year?

Thank You


======================================= MODERATOR'S COMMENT:
Please trim the post to which you respond.

"Jim" <noreplysoccer[at]hotmail.com> wrote in message
news:b7cb2d49.0406271043.3db047fd[at]posting.google.com...
- quote -

AMT and how it works fills volumes and a fair analysis of when and how it
will effect you is beyond the limits of this forum because we'd need to know
a lot more about your personal financial & tax situation that I would
imagine you'd be comfortable posting here. That being said, and with the
caveat that this is NOT entitled to be all inclusive, in a nutshell . . .

AMT recalculates your taxable income (your Alternative Minimum Taxable
Income or AMTI) by adding back "preference" and "adjustment" items.
Preference items are nontaxable income items like municipal bond interest.
Adjustment items are certain deductible items like employee business
expenses. AMT also uses an alternative exemption amount, which varies
depending on your filing status and income. Then AMT applies a relatively
flat rate of approximately 26% of tax to your AMTI and then compares the AMT
to your regular tax and you get to pay the higher amount.

One of the big problems with AMT is that the exemption amount has NOT kept
up with inflation adjustments like the standard deduction or personal
exemptions have. Consequently, as people make more money, are more tax
smart about their investments, incur additional expenses for their jobs, pay
higher state taxes, take out equity loans NOT used to improve the home,
etc., the AMT bites more and more people. As a side note, when I started in
the tax business back in April 1983 it was big news at the firm where I
worked if AMT applied to ANYONE - we'd all gather around that "lucky"
preparer's desk and talk about the intricacies of the AMT and what happened.
Now, probably 45% of my clients are subject to the AMT.

It is very difficult to point to an income level for a trigger to AMT. I've
got clients with AMT issues whose Adjusted Gross Income is $70,000 and
clients whose income is north of $500,000 with NO AMT issues. One client
this year was a bus mechanic who purchased a significant amount of new
tools - almost $60,000 worth. His AGI was $105,000 (obviously the tools are
financed). He had been expecting to get all of his withholdings back
because of a huge deduction for the tools, but because of the AMT problem he
is only getting about a 1/3 of his withholding back.

The best thing I can recommend you do is to meet with a professional who can
assess your individual situation - since you are using Turbo Tax, you could
actually open Form 6251 and look at the calculations to see how close you
may be to being subject to the AMT.

A final, interesting, note - many tax professionals incorrectly calculate
the AMT because they fail to add back nonqualifying equity mortgage interest
to the Form 6251. I have never met a taxpayer who did his own return and
included this. Be careful.

Gene E. Utterback, EA

I was in a discussion a few weeks ago with a CPA who said she and her
family paid the AMT when they filed income taxes. She happened to be
talking to another person who had to pay AMT as well. They are both
parents on the soccer team I coach...

Anyways, I know AMT is alternative Minimum tax, and quicken/ turbo tax
tells me I did not "qualify" for AMT. What would trigger me having to
pay AMT, and how would I know I'm getting close.

The net income for my wife and myself is about 100k, and my wife's
salary will grow quickly, I'm curious of the following issues:

What income level do we need to start planning on it (to avoid it?).
What things can we do to reduce our taxable income (401k etc...)
If AMT is hit, would that prevent contributions to a Roth IRA or
Traditional IRA? We currently are maxing these out, I knwo there
would be issues if I paid into IRA then found out April 15 I wasn't
eligible.

I am married, no kids, and live in Ohio (if that matters).

Thank You.