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Discussion Starter · #1 ·
Thanks to the Alternative Minimum Tax, this year I owe the IRS $7. :mad:

I ignored the April filing deadline, and aimed to file by the June deadline thinking I didn't owe any tax but I do. So am I going to be in any trouble for sending my $7 in late?

And as a cautionary note - if you receive any of your income in the form of dividends, beware the AMT calculation!!
 

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Bev, while we're on the subject of AMT, what triggers it? I've tried researching it and am still confused about what it is and what causes it to kick in.
AMT was one of those seemingly good ideas that kind of took on a life of its own and morphed into something else.

Originally (and probably still today, though I haven't had to deal with it recently), the idea was that those making over a certain amount should pay a certain minimum tax. It comes from the idea that many of the more lucrative (for the taxpayer) deductions, exemptions, exclusions and whatever else there is to lower your taxes are only eligible to the high earners. So, for those making over $X per year, they exclude the "loophole" items and then see if they are indeed paying the minimum acceptable rate of tax.

Problem seems to be that they forgot to raise the threshold income level, while the number of potentially "abusive" loopholes continued to grow. They talk all the time about revising or doing away with the AMT - but if you've looked at the papers lately, you'll see that getting anything involving money through Congress seems like a lost cause.
Cheers,
Bev
 

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Taking the foreign tax credit (form 1116) is well known for invoking the AMT. The one time I needed to take foreign tax credits I had to file the AMT form - though I didn't owe any additional tax.
Cheers,
Bev
 
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