Alternative Minimum Tax (AMT)

The AMT is an alternative tax system based on fewer deductions and more taxable income. You pay the higher of AMT or regular tax.  For example no deduction for state and local taxes is allowed for AMT. The new tax law limited state and local taxes to $10,000 and eliminated miscellaneous itemized deductions which were also not allowed for the AMT. The new tax law also increased the AMT exemption amounts for 2018. So far this tax season I have not seen any of my clients paying the AMT which is great news. I hope it continues.