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Using Credits and Rebates on a Tax Return

What is this alternative minimum tax?

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Art Auerbach
Tax Director, Goodman & Company, LLP
http://www.goodmanco.com/  

Serving clients since 1932, Goodman & Company brings 75 years of knowledge and experience to the demands of today's ever-changing business environment. Throughout the past 75 years, we've never strayed from our mission-to provide each client with personal, high-quality service using the most up-to-date technology and resources.

What is this alternative minimum tax?

Basic information to prepare an individual income tax return, Form 1040 and the basic schedules. This video is designed for those individuals who want to undertake the preparation of their tax return. There are tips and pointers for those who have attempted this feat in prior years.

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Host: What is this Alternative Minimum Tax?

Arthur Auerbach: The Alternative Minimum Tax is actually a parallel tax calculation. When everybody, every American tax payer calculates their tax, you are actually simultaneously doing two taxes. You are doing what's known as the Regular Tax and you are doing the Alternative Minimum Tax and the statute requires you to pay the higher of the two. There are certain things that are not deductible for the AMT, for example, we discussed taxes being deductible on Schedule A of the 1040. None of those taxes are available for the Augment tax. If you have Home Equity liens and you use the Home Equity loans to pay off Credit cards. Buy a boat, buy a car, buy a large screen TV. That Home equity line interest is not available for the AMT but it is available for the regular tax. So the Augment tax is a separate calculation and any tax professional or any program that you use are going to be asking you questions about certain things on the return and you may have to split items apart so that they can do the correct calculation of regular versus AMT.

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