subject: Alternative Minimum Tax Planning Ideas...standard Deduction [print this page] A taxpayer has a choice of itemizing deductions or taking the Standard Deduction in computing his Regular Tax liability. The Standard Deduction is a fixed dollar amount that varies depends on filing status. In tax year 2009 it is $5,700 for Single and $11,400 for Married Filing Jointly what well call the base Standard Deduction.
State sales taxes paid in 2009 on the purchase of a qualifying new automobile can be added to the base Standard Deduction. Similarly, a limited amount of real estate taxes, and certain casualty losses, also may be added.
For purposes of the Alternative Minimum Tax, however, the base Standard Deduction is not allowed. But if the taxpayer was eligible to take a Regular Tax deduction for a casualty loss or for the new car sales tax in addition to the Standard Deduction, these items also are allowed for the AMT. The Form 6251 shows the AMT payer how to do this. Note also that if the Standard Deduction is chosen for Regular Tax purposes, it must also be used when calculating the AMT it is a binding tax election.
The choice between itemizing and taking the Standard Deduction seems simple: if the total of a taxpayer's itemized deductions is less than the Standard Deduction, then the Standard Deduction will result in less being paid. But this is not always the case when the Alternative Minimum Tax is involved. For AMT payers, there are certain situations where itemizing for Regular Tax purposes actually could lower the amount of AMT paid.
To illustrate, assume a taxpayer lives in Florida (no state income tax), rents instead of owns a home (no real estate taxes or mortgage interest), and didnt make any taxable purchases this year (no sales tax deduction). But suppose this taxpayer also gave $10,000 to charity. The Standard Deduction for 2009 for joint return filers is $11,400, so this would appear to be the better choice. However, if the taxpayer were in the Alternative Minimum Tax there would be no benefit at all from the Standard Deduction, but there would be a benefit of up to $2,800 (the 28% Alternative Minimum Tax bracket times the $10,000 charitable contribution deduction) if itemizing is elected instead. Even the lower 26% tax rate would result in nearly the same benefit. So, somewhat counterintuitively, in this example opting to pay more Regular Tax will result in a lower overall tax liability.
by: George Bauernfeind
CBD exceeded my expectations in every way thanks. I've struggled with insomnia in the interest years, and after trying CBD like cbd oil for sale full spectrum because of the key time, I at the last moment practised a loaded eventide of restful sleep. It was like a weight had been lifted mad my shoulders. The calming effects were calm despite it intellectual, allowing me to roam off logically without sympathies confused the next morning. I also noticed a reduction in my daytime apprehension, which was an unexpected but welcome bonus. The taste was a fraction earthy, but nothing intolerable. Blanket, CBD has been a game-changer for my nap and solicitude issues, and I'm appreciative to procure discovered its benefits.
welcome to Insurances.net (https://www.insurances.net)
