How to Avoid Tricky Tax Traps:
From January 2005
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The best strategies for one person might be terrible for the guy next door earning the same amount of money.
Having said all that, it’s a new year, and mere mortal taxpayers can do a few things to influence their own destinies. Take three examples to start: The high-level employee with a six-figure income, the big boss pulling down $1 million a year and the small-business owner.
Joe & Jane Paycheck
The biggest threat to all your careful tax planning is the Alternative Minimum Tax (AMT). As the name implies, it’s an alternative the government uses to keep people from trimming their tax bills too much. While the regular federal income tax rates start at 15 percent and slide up to 35 percent, the AMT starts at 26 percent.
Heed the advice of the tax pros, who recommend you find out as soon as you can whether you’re going to get caught in the AMT web.
“The Alternative Minimum Tax is catching a lot more middle-income taxpayers. We find a lot more of our clients are falling into a trap,” says Kevin McCarl, a supervisor who specializes in tax planning at Tate, Propp, Beggs & Sugimoto in Sacramento.
How Does the AMT Work and When Does it Kick in?
Continued...
Having said all that, it’s a new year, and mere mortal taxpayers can do a few things to influence their own destinies. Take three examples to start: The high-level employee with a six-figure income, the big boss pulling down $1 million a year and the small-business owner.
Joe & Jane Paycheck
The biggest threat to all your careful tax planning is the Alternative Minimum Tax (AMT). As the name implies, it’s an alternative the government uses to keep people from trimming their tax bills too much. While the regular federal income tax rates start at 15 percent and slide up to 35 percent, the AMT starts at 26 percent.
Heed the advice of the tax pros, who recommend you find out as soon as you can whether you’re going to get caught in the AMT web.
“The Alternative Minimum Tax is catching a lot more middle-income taxpayers. We find a lot more of our clients are falling into a trap,” says Kevin McCarl, a supervisor who specializes in tax planning at Tate, Propp, Beggs & Sugimoto in Sacramento.
How Does the AMT Work and When Does it Kick in?
Continued...
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Community Comments