Archive for November, 2013

Calculating Alternative Minimum Tax Income

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In calculating the Alternative Minimum Tax Income, the first step is to add certain adjustments to taxable income. These include:

  • Personal and dependent exemptions
  • The amount claimed for the standard deduction or, if itemized deductions were claimed, the following items
    1. Medical expenses deducted, not greater than 10% of AGI
    2. State and local tax deductions
    3. Real estate and property tax deductions
    4. Certain interest
    5. Most miscellaneous deductions

Itemized deductions for charitable contributions and casualty and theft loss are not added back in when calculating the Alternative Minimum Tax Income.

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Individual Retirement Arrangements (IRAs)

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An individual retirement account is a trust or custodial account set up in the United States for the exclusive benefit of a taxpayer or his beneficiaries. A taxpayer creates this account with a written document. The document must show that the account meets all of the following requirements:

  • The trustee or custodian must be a bank, a federally insured credit union, a savings and loan association, or an entity approved by the IRS to act as trustee or custodian.
  • The trustee or ...
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