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Steps to Success: Alternative Minimum Tax Planning

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<html> <head> <title>Steps to Success: Alternative Minimum Tax Planning</title> </head> <body> <h1>Steps to Success: Alternative Minimum Tax Planning</h1> <div class="info">Author: <a href="http://www.goinglegal.com/author_1_146699.html">kinal</a></div><div class="body">In the legislative environment in which we currently find ourselves, significant changes affecting the taxation of individuals - that's you and me - are expected to be made, and to be made soon. All of this activity likely will also have a dramatic impact on the Alternative Minimum Tax. What this means is basically two things:<br /> <br /> First, if Congress does not once again adjust the AMT exemption amount for 2010 - effective for January 1, 2010 - those who are paying the AMT now will pay a much higher amount. In addition, another 24 million taxpayers potentially will be trapped by the AMT for the first time.<br /> <br /> Second, for those who already are in the AMT trap, there is a significant one-time opportunity to achieve a permanent tax savings benefit due to the expected increase in the regular tax as proposed by the Obama administration.<br /> <br /> The only good news is that being aware of these core issues now can present a number of tax planning opportunities—for everyone, but especially for those who are already paying the AMT.<br /> Even though everyone's situation is different, here are some key steps you need to take. And the sooner you get started, the more options you will have:<br /> <br /> Know which items could cause you to be caught in the AMT. The IRS form shows 27 unique items, any one of which or any combination of which can land you in the AMT.<br /> <br /> Understand the current legislative environment and stay on top of tax policy changes. If you don't there simply is no effective way to do tax planning, especially for the <a href="http://www.amtindividual.com">Alternative Minimum Tax </a>.<br /> Understand the relationship between the regular tax and the AMT, including differences in the tax rate structures and their overall impact. There are significant differences in the computation of your tax under the regular method and under the AMT. There are significant differences in the tax rate you will pay under these two alternative methods.<br /> <br /> Identify and implement strategies that are right for you, to find the optimal tax solution with a goal of reducing your AMT. State and local taxes, which are a common culprit among those paying the AMT, vary significantly from state to state. What you can do with these, in terms of planning, also can vary significantly.<br /> <br /> Continue to review your plan periodically-- especially as your income, deductions, and personal and family situation change—to see how that impacts your assumptions. This is common sense - nothing in life remains static.<br /> <br /> <br /> George Bauernfeind is with <a href="http://www.amtindividual.com">AMT Individual </a> - providing information on alternative Minimum Tax Planning. He writes articles to help the tax payers to pay less Alternative Minimum Tax. He recommend to use <a href="http://www.amtindividual.com"> Alternative Minimum Tax Calculator</a> to reduce Alternative Minimum Tax.</div> <div class="source">Article Source: <a href="http://www.goinglegal.com/steps-to-success-alternative-minimum-tax-planning-922679.html">http://www.goinglegal.com/steps-to-success-alternative-minimum-tax-planning-922679.html</a></div> <div class="author"> <div class="authorBio"></div> </author> </body> </html>

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Steps to Success: Alternative Minimum Tax Planning Author: kinal In the legislative environment in which we currently find ourselves, significant changes affecting the taxation of individuals - that's you and me - are expected to be made, and to be made soon. All of this activity likely will also have a dramatic impact on the Alternative Minimum Tax. What this means is basically two things: First, if Congress does not once again adjust the AMT exemption amount for 2010 - effective for January 1, 2010 - those who are paying the AMT now will pay a much higher amount. In addition, another 24 million taxpayers potentially will be trapped by the AMT for the first time. Second, for those who already are in the AMT trap, there is a significant one-time opportunity to achieve a permanent tax savings benefit due to the expected increase in the regular tax as proposed by the Obama administration. The only good news is that being aware of these core issues now can present a number of tax planning opportunities—for everyone, but especially for those who are already paying the AMT. Even though everyone's situation is different, here are some key steps you need to take. And the sooner you get started, the more options you will have: Know which items could cause you to be caught in the AMT. The IRS form shows 27 unique items, any one of which or any combination of which can land you in the AMT. Understand the current legislative environment and stay on top of tax policy changes. If you don't there simply is no effective way to do tax planning, especially for the Alternative Minimum Tax . Understand the relationship between the regular tax and the AMT, including differences in the tax rate structures and their overall impact. There are significant differences in the computation of your tax under the regular method and under the AMT. There are significant differences in the tax rate you will pay under these two alternative methods. Identify and implement strategies that are right for you, to find the optimal tax solution with a goal of reducing your AMT. State and local taxes, which are a common culprit among those paying the AMT, vary significantly from state to state. What you can do with these, in terms of planning, also can vary significantly. Continue to review your plan periodically-- especially as your income, deductions, and personal and family situation change—to see how that impacts your assumptions. This is common sense - nothing in life remains static. George Bauernfeind is with AMT Individual - providing information on alternative Minimum Tax Planning. He writes articles to help the tax payers to pay less Alternative Minimum Tax. He recommend to use Alternative Minimum Tax Calculator to reduce Alternative Minimum Tax. Article Source: http://www.goinglegal.com/steps-to-success-alternative-minimum-tax-planning-922679.html About the Author:

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