Home / Articles / AMT triggers could boost your tax bill if you’re not careful

AMT triggers could boost your tax bill if you’re not careful

October 22, 2014

Share:

A fundamental tax planning strategy is to accelerate deductible expenses into the current year. This typically will defer — and in some cases permanently reduce — your taxes. But there are exceptions. One is if the additional deductions this year trigger the alternative minimum tax (AMT). This is a separate tax system that limits some deductions and doesn’t permit others. Here are some deductions that can be AMT triggers:

State and local income tax deductions, Property tax deductions, and Miscellaneous itemized deductions subject to the 2% of adjusted gross income floor, such as investment expenses and unreimbursed employee business expenses. But deductions aren’t the only things that can trigger the AMT. So can certain income-related items, such as:

Incentive stock option exercises, Tax-exempt interest on certain private activity bonds, and Accelerated depreciation adjustments and related gain or loss differences when assets are sold.

Fortunately, with proper planning, you may be able to avoid the AMT, reduce its impact or even take advantage of its lower maxi­mum rate. If you’re concerned about any of these triggers or would like to know what else might trigger the AMT, please contact us. We can help you determine the best strategies for your situation.

© 2014

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

Guidance

Related Articles

Article

2 Min Read

How to end the headaches of SLFRF reporting

Article

2 Min Read

Clean Vehicle Credit Comes with Caveats

Article

2 Min Read

IRS Offers Penalty Relief for 2019, 2020 Tax Years

Article

2 Min Read

Benefits of Using a Lease Management Software Tool to Implement ASC 842

Article

2 Min Read

How Unrelated Business Income Tax (UBIT) Works for Not-for-Profits

Article

2 Min Read

ESOP evaluation from a succession planning perspective

Get in Touch.

What service are you looking for? We'll match you with an experienced advisor, who will help you find an effective and sustainable solution.
  • Hidden
  • This field is for validation purposes and should be left unchanged.