avoiding AMT: is it OK to NOT claim a dependent as an exemption to avoid AMT?

AMT. The question is--can I not claim as exemptions, all 4 of my kids?

1) No. There is no discretion granted to not claim someone. 2) It won't make a difference to your bottom-line taxes if you're subject to AMT.

What is it you hope to gain by avoiding AMT? Is it just the extra effort of filing the AMT forms?

You can, of course, avoid the AMT by arranging for your regular tax to increase so that AMT is no longer an issue, but this won't save you any money. You only avoid the AMT by making sure your tax bill increases enough so that it ends up being at least as high as it would be under the AMT rules.

So, I suppose you could arrange things so that your taxes are higher than they otherwise would be, but most people choose not to do this. Unless you have some complicated AMT issues that make the additional paperwork so onerous that you would be willing to pay to avoid that paperwork.

(mounts soapbox)

The OP's misconception is a logical outcome of the lousy fact that the "AMT" line on 1040 the difference of the Tentative Minimum Tax and the (for lack of a better term) Regular Tax: AMT = TMT - RT

There are multiple ways to shrink a difference (and so make the AMT line smaller), but only a couple of them will reduce the bottom line tax you pay and some will make you pay more!

• Increase both TMT and RT but increase RT more. This will reduce AMT but will result in you paying MORE tax.

• Leave TMT alone but increase RT. This will reduce AMT but will leave the tax out pay unchanged. (If it were allowed, this is the category the OP's idea falls into, so as someone already said, it would accomplish nothing even if allowed).

• Leave RT alone but decrease TMT. This will reduce what you actually pay.

• Reduce both TMT and RT but reduce TMT more. This will reduce what you actually pay.

I note that in theory you could reduce both TMT and RT but reduce *RT* more. This will actually increase the "AMT" line on your 1040 but will nevertheless leave you paying less tax.

I know it'll never happen but I wish the AMT was implemented as a fully parallel set of forms 1040-AMT, Sched A-AMT, etc. for those forms where there are different AMT and regular tax rules instead of the current system of reconciling all differences on 6251 and reporting the different between TMT and RT as "AMT" on 1040.

Then it would be much more clear exactly what is going on with AMT and what strategies would actually reduce your bottom-line tax.

-- Rich Carreiro snipped-for-privacy@rlcarr.com

[...]

I second that! Although, the whole point of the AMT is to prevent you from ever going below a certain "bottom-line tax", so I'm not sure that new forms would change things very much, beyond making the calculations more clear. If there was a way to game the calculations, I think it would have popped up by now, despite the obfuscation of the current Form

6251 procedure.

-Mark B.

Well, the idea wouldn't be to facilitate gaming the system, it would be to help prevent people from naively/mistakenly doing things that reduce the "AMT" line on 1040 but which leave the actual taxes paid unchanged (or even make them higher!)

-- Rich Carreiro snipped-for-privacy@rlcarr.com