Beyond Brokerage Getting Some Help With the AMT
TAX TIME IS ALL over but the pouting. But for many members of the so-called mass affluent investing bracket, the April 17 deadline raised the specter of the alternative minimum tax, the formula that increasingly is an unwelcome fact of life in millions of moderately wealthy households.
It's unwelcome because it cuts out many of the itemized deductions that ease the pain of being in the top federal income tax bracket of 35%. While it's a complex formula, the most obvious difference in the way the AMT is calculated is that it eliminates the federal deduction for state and local income taxes, boosting one's overall tax liability. Since the feds require people to pay the highest calculated tax rate, and the numbers used to determine who's liable for the AMT haven't been changed in the 37 years since it was passed, it's easy to see why it's loathed by many.
