Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
AMT is getting too close .... Help
Old 05-01-2006, 12:40 PM   #1
Dryer sheet aficionado
 
Join Date: Sep 2005
Posts: 36
AMT is getting too close .... Help

My question regards avoiding the AMT. It appears that this year I will bump into it unless I make a couple of changes. The simplest idea I can come up with is to make “catch-up” contributions to my 401 K since I am over 50 and thereby lower my net income. Will this lower figure apply to the AMT limits? I am close enough that this contribution would do it if it applies. If not I will have to restructure a bit to do some avoidance.

Also, I would like to take a long term position in the new dividend fund Vanguard is opening, but do not want to start down the same path with earnings that apply to the AMT. Any knowledge shared would be appreciated.

I posted this question on diehards, so if you frequent both please don't get upset. These are my two favorite financial boards.

John
__________________

__________________
plattj1 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: AMT is getting too close .... Help
Old 05-01-2006, 01:14 PM   #2
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Re: AMT is getting too close .... Help

Quote:
Originally Posted by plattj1
My question regards avoiding the AMT. It appears that this year I will bump into it unless I make a couple of changes. The simplest idea I can come up with is to make “catch-up” contributions to my 401 K since I am over 50 and thereby lower my net income. Will this lower figure apply to the AMT limits? I am close enough that this contribution would do it if it applies. If not I will have to restructure a bit to do some avoidance.



John
Yes, the 401k contributions are not counted in your income for AMT purposes.
__________________

__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: AMT is getting too close .... Help
Old 05-01-2006, 01:58 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,408
Re: AMT is getting too close .... Help

are you hitting the amt because of income or deductions?
__________________
mathjak107 is offline   Reply With Quote
Re: AMT is getting too close .... Help
Old 05-01-2006, 02:47 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,408
Re: AMT is getting too close .... Help

last year we hit the amt tax because of large capital gains....this year we will trip it again because the large amounts of state and local taxes we paid would have left us owing little tax on our more normal usual income and so back on the amt we go.....it sucks this year too because i just had 6 dental implants done and the medical goes bye bye too under the amt
__________________
mathjak107 is offline   Reply With Quote
Re: AMT is getting too close .... Help
Old 05-01-2006, 08:05 PM   #5
Dryer sheet wannabe
 
Join Date: Jan 2006
Posts: 16
Re: AMT is getting too close .... Help

Have you run the numbers w/ different state witholding numbers (itemized deductions)? Last year I was able to, barely, avoid AMT by stopping our state withholdings. I did a tax projection in November. Unfortunately, we will probably fall into it this year unless our fearless leaders change the code Our state doesn't not enforce underpayment penalties so it worked to our favor. I may do the same this year and will decide towards the fall (our income varies b/c of husband's S corp income).
Hope this gives you an idea.
Robin
__________________
pinkmali is offline   Reply With Quote
Re: AMT is getting too close .... Help
Old 05-02-2006, 09:33 AM   #6
Dryer sheet aficionado
 
Join Date: Sep 2005
Posts: 36
Re: AMT is getting too close .... Help

Thanks for the help! I will change things a little and contribute more. That should do it for another year.
__________________

__________________
plattj1 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
I'm in AMT Hell - anyone understand how to recover AMT Credit from ISO exercise? JB FIRE and Money 4 04-14-2007 10:39 AM
close unused credit cards or keep open? bright eyed FIRE and Money 13 03-06-2007 09:40 PM
Capital Losses and AMT Delawaredave FIRE and Money 2 02-20-2007 05:32 AM
amt & homesteaded property lazygood4nothinbum FIRE and Money 13 04-02-2006 01:51 PM
AMT Information cube_rat Young Dreamers 22 11-11-2005 08:36 AM

 

 
All times are GMT -6. The time now is 07:42 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.