What’s New With the Alternative Minimum Tax?

What’s New With the Alternative Minimum Tax?

What’s New With the Alternative Minimum Tax?

The Tax Cut and Jobs Act affected numerous portions of the nation’s tax law. However, one part that hasn’t been discussed much is its effect on the Alternative Minimum Tax (AMT). The AMT has been around since 1969 and its purpose has always been to make sure that wealthy people pay enough in taxes. 

But over the years, the AMT was starting to affect more middle-class taxpayers because the rules that governed it weren’t updated as the tax code changed. But that’s all changed now. Under the old law, about 5 million taxpayers would have had to pay the AMT. Now, that number is expected to drop to about 200,000 for the 2018 tax year. 

In fact, with so few taxpayers being subject to the AMT this year, the IRS said it plans to remove its AMT Assistant tax tool from its website.

So what has changed? 

1. The AMT exemption has gone up significantly. It’s now $109,4000 for those married filing jointly and $70,300 for single filers. It’s $54,700 for married filing separately. By comparison, last year those numbers were $84,000, $54,300 and $42,250. 

2. Additionally, the income levels for exemption phase out have also increased. They are $1 million for married couples filing jointly and $500,000 for all other taxpayers.  

3. Furthermore, several of the tax breaks that would cause the AMT to apply to middle class taxpayers have been changed. That means it’s much more difficult to trigger the AMT because you need a lot more preference items (such as mortgage interest, personal exemptions, SALT deductions, etc.) to do so. 

 

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Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan L. Olsen, CPA, Wikipedia Bio

 

 

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The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

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