John M. Hoffman & Associates CPAs

Frequently Asked Questions

Alternative Minimum Tax (AMT)

 

"Who gets caught in the AMT?"

Well first lets describe the people who do NOT get caught in the AMT. People who earn so much money that their effective regular tax rate is higher than the 28% AMT rate are not in the AMT because they are paying a higher rate of regular tax. The other group of people NOT paying AMT are people whose income is low enough that they get that full AMT exemption and their regular tax exceeds their tentative AMT.

That leaves a lot of upper middle income taxpayers. That, and people who get involved in Incentive Stock Options (ISOs).