Until the law is changed, the Annualized Installments will
have to be computed on the lower AMT Exemption amount and
other tax facts because congress may never change the AMT or
other "lapses". If you anticipate lower taxes, and that
doesn't happen, there is no way to "go back" and correct
your first AI installment (except with withholding).

As in 2003, the IRS will probably allow any changes to apply
retroactively on the 2210 AI so the overpayment will
reduce later installments. The 2210 AI calculators for
current installments have no problem with this because they
do not include an estimate of current year's tax in their AI
formulas, nor do they use last year's tax program.

ed

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Likely most pros here know that the AMT exemption was
temporarily adjusted several years back. It was raised from
the original $45K to $58K before the phase out started.

That adjustment expired last year! The result is that my
projections now include a HUGH AMT hit for many of my
clients.

I "hear" that Congress is talking about extending the higher
AMT exemption for 1 year, but I haven't seen anything
substantive either way.

I have two questions:

Will the AMT exemption revert to the old rates, killing many
taxpayers financially, or will Congress extend the higher
exemption?

How are you guys handling it with your clients in projecting
for 2006?

Thanks,
Gene E. Utterback, EA, RFC

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >