Accounting | Consulting | Taxes

Avoiding Alternative Minimum Tax

The Alternative Minimum Tax (AMT) isn't just for the wealthy anymore. When the law passed in 1969, it was designed to ensure that those in the uppermost tax brackets still paid their fair share after accounting for their tax credits and itemized deductions. In 2010, 33 million taxpayers had to pay the AMT so it's important to understand how you can minimize your payment.

Maco & Associates works with individuals whose earnings total more than $150,000 to reduce their AMT liability. Want to learn more about this unique opportunity? Email and we'll set up a time to talk.

Am I a candidate for the Alternative Minimum Tax?

These are some of the typical triggers for the AMT but there are others that need to be taken into account.

Many think that if they buy real estate, they will avoid AMT...wrong! Real estate rental losses are limited. If you actively participate in rental real estate activity, you can deduct up to $25,000 of your rental loss even though it is passive. However, if you earn more than $100,000 per year, losses are limited and phased out totally when your income exceeds $150,000 – so you get no tax break.

We have solutions for these types of problems. Proactive planning is the way to manage your tax situation and we are here to work with you year round.

How is the AMT calculated?

You may know that with regular federal taxes, you add up your total income and subtract deductions and exemptions to arrive at your tax. You can reduce the tax further by applying various credits, like the Child Tax Credit or the American Opportunity Credit. Basically, the AMT puts you at the maximum tax rate by adding back in or limiting your itemized deductions and reducing exemptions so you are taxed at the maximum rate specified by law.

What are the exemption amounts for 2011?

As part of the 2010 Tax Relief Act, the following amounts are legislated for 2011:

These amounts of income are not subject to the AMT – they are exempt. Income over these amounts may be subject to the AMT, which is assessed at:

How can I find out my AMT liability?

The IRS offers an Alternative Minimum Tax Assistant for Individuals, located here. You can also speak with us to determine your liability.


Planning ahead for the AMT is important, but devising strategies alone can be tough since the law is constantly changing. Maco & Associates stays current on all tax law adjustments and we're experts on avoiding this tax. We know the AMT can be confusing, but we help you make sense of the numbers!

contact us today to reduce your amt liability

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