TurboTax put me in AMT hell

No shocking experiences here. If you are in the SF BayArea, your real problem is the CA withholding. The combination of state income tax withholding, property taxes, and a total of four exemptions, dual full-time incomes, and you've hit the AMT trifecta.

I live in Oregon (another high income tax state) and my wife and I have been "enjoying" the fruits of our labors each year by having to pay the AMT. Been doing so since 1999. Welcome to our world.

AMT despiser, loather, hater

Portland OR area

So, how does it feel to be one of those evil rich rich people that don't pay near enough their fair share, that the Democrats are always complaining about?

I think you mistated the issue in your subject! TurboTax had nothing to do with you're being placed in, as you call it "AMT Hell." Thank the U.S. Congress and your local senators and house representatives.

WE need to put pressure on our representatives to fix the AMT problem. In the early 70s (I think it was) someone said "those no good rich folks" with all those write offs are getting away with something. Lets make them pay their fair share.

They never changed the threshold so now with inflation and 30 years later, WE are those "no good rich folks".

Unfortantly I joined the AMT club two years ago... yes I'm from CA..

09/19/02 Just When We Think We're Out?The AMT Pulls Us Back In At the very moment President Bush's tax plan phases in, middle class Americans will increasingly pay the Alternative Minimum Tax (AMT), negating the effects of tax relief. WASHINGTON - When class-warfare politics still dominated America, Congress passed the Alternative Minimum Tax (AMT), which sought to make sure that wealthy Americans paid their "fair" share of taxes. But thirty-three years later, that very tax is hitting the middle class - and hard. The AMT became law in 1969 after the American public became outraged that 155 wealthy Americans escaped federal income taxes by taking advantage of numerous deductions. But over the past decade, the number of filers paying AMT increased tenfold to 1.3 million people, and the next eight years will witness even more pronounced and explosive growth. Indeed, nearly one out of three tax filers, or an estimated 36 million people, will be subject to the AMT by 2010. This tax will be slapped on average American families largely because the AMT is not indexed for inflation - consequently, taxes will be pushed upward through bracket creep. Furthermore, the AMT has an extraordinarily expensive compliance cost relative to the revenue that is generated from the tax. While consensus is moving toward a simpler tax filing system, the AMT acts in quite the opposite manner, forcing families to fill out two forms, which adds approximately six additional hours of tax preparation time. Taxpayer advocate Grover Norquist, who heads Americans for Tax Reform (ATR) in Washington, said that the AMT threatens to cancel out any benefit arising from the Bush tax cuts. "The AMT is a relic from the past, and while President Bush's tax cuts ease the pain of taxes for working families, the AMT will kick into effect and punish them for their hard work," he said. When the Bush tax cuts become fully effective, 85 percent of taxpayers with two or more children will have to pay the AMT instead of the regular income tax. This tax will not target the wealthiest taxpayers as it was intended, but instead affect hard-working middle-class families that could be making as little as $75,000 per year. "This is a classic case of Congress not wanting to kill a cash cow," continued Norquist, "even when the cow has horns pointed at millions of Americans who were never supposed to be milked. President Clinton refused to even index this tax for inflation, which is the least that Congress can do for American taxpayers." ### Americans for Tax Reform is a non-partisan coalition of taxpayers and taxpayer groups who oppose all federal and state tax increases. For more information or to arrange an interview with Mr. Norquist please contact Christopher Butler at (202)785-0266 or by email at snipped-for-privacy@atr.org.

As already stated, its not TurboTax that is responsible for the AMT ... it just does the calculations.

But if you really want to get worried, consider this:

The current (2005) AMT exemption for a married couple is $58,000. This sunsets this year, and next year (2006 taxes) the exemption returns to $45,000 - thereby trapping millions more, and increasing the taxes on those already in the net.

Alan

i also hit AMT this year - and played around with a copy of my tax file - and modeled different scenarios - to see if there was any way to reduce taxes or eliminate / reduce AMT. I tested all sorts of approaches and in every case was stuck with AMT unless my income increased enormously (which will not happen). So we are stuck with it. Just do as much as you can in IRA etc and hope for a better future

alan