Although the American Taxpayer Relief Act of 2012 finally ended more than a decade of temporary AMT patches and fixes that kept expiring and needing renewals, the tax act didn’t actually repeal the AMT permanently. Instead, the big tax package provided permanent “relief” by locking in the AMT exemptions from 2011, and adjusting the exemption — and everything else under the AMT system — for inflation going forward.

As a result, high-income individuals continue to face potential exposure to the AMT, depending on their income levels and on the adjustments and preference items that have to be added back to income for AMT purposes. Fortunately, though, a client’s AMT exposure can be quickly evaluated by looking at a chart that details income after deductions and the amount of deductions that are lost for AMT purposes.

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access