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William Byrnes (Texas A&M) tax & compliance articles

Posts Tagged ‘Alternative Minimum Tax’

Income Higher Than $51,900? Does Alternative Minimum Tax (AMT) Apply to You?

Posted by William Byrnes on March 10, 2014


The IRS’ Tax Tip 2014-10

The IRS published a recent tax tip for the 2014 tax filing season to remind taxpayers about the possibility that even if no tax is owed under regular tax rules, under the special calculation rules of the alternative minimum tax system, tax may be owed anyway.  Excerpted below:

The AMT attempts to ensure that some individuals who claim certain tax benefits pay a minimum amount of tax.

1. You may have to pay the tax if your taxable income, plus certain adjustments, is more than the AMT exemption amount for your filing status. If your income is below this amount, you usually will not owe AMT.

2. The 2013 AMT exemption amounts for each filing status are:

• Single and Head of Household = $51,900

• Married Filing Joint and Qualifying Widow(er) = $80,800

• Married Filing Separate = $40,400

3. The rules for AMT are more complex than the rules for regular income tax. The best way to make it easy on yourself is to use IRS e-file to prepare and file your tax return. E-file tax software will figure AMT for you if you owe it.

4. If you file a paper return, use the AMT Assistant tool on IRS.gov to find out if you may need to pay the tax.

5. If you owe AMT, you usually must file Form 6251, Alternative Minimum Tax – Individuals. Some taxpayers who owe AMT can file Form 1040A and use the AMT Worksheet in the instructions.

Additional IRS Resources:

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2012 Budget Talk: Capital Gains, Dividends, and 1099 Information Reporting

Posted by William Byrnes on March 23, 2011


Why is this Topic Important to Wealth Managers?  A producer should be able to present a perspective of the potential impact of current budget proposals upon investments that will be realized in the future.  Thus, Advanced Market Intelligence discusses certain features to the proposed federal budget that impact fiscal year 2012.

The President’s new budget proposal included many revenue raising measures.  However, below are two areas affecting the tax code that will actually increase the deficit, and also have a strong likelihood to have an impact on clients’ decisions made today.

Currently, the maximum rate of tax on the qualified dividends and net long-term capital gains of an individual is 15 percent. [1] In addition, any qualified dividends and capital gains that would otherwise be taxed at a 10- or 15-percent ordinary income tax rate are taxed at a zero percent rate.

The zero- and 15-percent rates for qualified dividends and capital gains are scheduled to expire for taxable years beginning after December 31, 2012. [2] In 2013, the maximum income tax rate on capital gains would increase to 20 percent (18 percent for assets purchased after December 31, 2000 and held longer than five years), while all dividends would be taxed at ordinary tax rates of up to 39.6 percent.

Taxing qualified dividends at the same low rate as capital gains for all taxpayers is said to reduce the tax bias against equity investment and promote a more efficient allocation of capital.  Eliminating the special 18-percent rate on gains from assets held for more than five years is thought to further simplify the tax code.  Read the analysis at AdvisorFYI

 

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Selected Provisions and Analysis of the Tax Relief Act of 2010

Posted by William Byrnes on February 8, 2011


Written by the foremost experts in the field – Professor William H. Byrnes, Esq., LL.M, and Robert Bloink, Esq., LL.M

Understand the Act’s Implications for You and Your Clients

  • Analyzes important insurance, estate, gift, and other elements of the Act
  • Provides pertinent information on other important 2010 tax developments
  • Convenient Q&A format speeds you to the information you need – with answers to over 100 important questions

Summary Table of Contents

  • Analysis of the Tax Relief Act of 2010
    • Income Tax Provisions
    • Estate Tax Provisions
    • Generation Skipping Transfer Tax
    • Deduction for State and Local Sales Taxes
    • Alternative Minimum Tax
    • Tax Credits
    • Payroll Tax Holiday
    • Wage Credit for Employees who are Active Duty Members of the Military
    • Charitable Distributions from Retirement Accounts
    • Bonus Depreciation and Section 179 Expensing
    • Basis Reporting Requirements for Brokers and Mutual Funds
    • Regulated Investment Company Modernization Act of 2010
    • Health Care Act
    • Form 1099 Reporting Requirement for Businesses
    • American Jobs and Closing Tax Loopholes Act of 2010
    • Requirements for Tax Return Preparers

Price: $12.95 + shipping & handling and applicable sales tax

To order:

With our Custom Imprint program, you can place your company’s logo on the cover of this analysis and you’ll leave a lasting impression.  Call 1-800-543-0874 for additional information.

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Selected Provisions and Analysis of the Tax Relief Act of 2010

Posted by William Byrnes on January 18, 2011


Written by the foremost experts in the field, Robert Bloink, Esq., LL.M and Professor William H. Byrnes, Esq., LL.M, CWM 

Understand the Act’s Implications for You and Your Clients

  • Analyzes important insurance, estate, gift, and other elements of the Act
  • Provides pertinent information on other important 2010 tax developments
  • Convenient Q&A format speeds you to the information you need – with answers to over 100 important questions

Summary Table of Contents

  • Analysis of the Tax Relief Act of 2010
    • Income Tax Provisions
    • Estate Tax Provisions
    • Generation Skipping Transfer Tax
    • Deduction for State and Local Sales Taxes
    • Alternative Minimum Tax
    • Tax Credits
    • Payroll Tax Holiday
    • Wage Credit for Employees who are Active Duty Members of the Military
    • Charitable Distributions from Retirement Accounts
    • Bonus Depreciation and Section 179 Expensing
    • Basis Reporting Requirements for Brokers and Mutual Funds
    • Regulated Investment Company Modernization Act of 2010
    • Health Care Act
    • Form 1099 Reporting Requirement for Businesses
    • American Jobs and Closing Tax Loopholes Act of 2010
    • Requirements for Tax Return Preparers

Product Information:

Softcover/64 pages total;  42 pages of questions and answers

Publication Date: January 2011

Publication Number: 1350011

Price: $12.95 + shipping & handling and applicable sales tax

To order:

With our Custom Imprint program, you can place your company’s logo on the cover of this analysis and you’ll leave a lasting impression.  Call 1-800-543-0874 for additional information.

Posted in Taxation | Tagged: , , , , , , , | Leave a Comment »

Obama Tax Cuts Alternative Minimum Tax Exemption Extensions

Posted by William Byrnes on January 15, 2011


“For more than three decades, the individual income tax has consisted of two parallel tax systems: the regular tax and an alternative tax that was originally intended to impose taxes on high-income individuals who have no liability under the regular income tax.” [1]

Current law imposes an alternative minimum tax (AMT) only on individuals.  “The stated purpose of the alternative minimum tax (AMT) is to keep taxpayers with high incomes from paying little or no income tax by taking advantage of various preferences in the tax code.” [2]

The parallel tax structure to the regular income tax law requires individuals “to recalculate their taxes under alternative rules that include certain forms of income exempt from regular tax and that do not allow specific exemptions, deductions, and other preferences.” [3]

Generally, the AMT is an amount that is the excess of the “tentative minimum tax” over the regular income tax.

Tentative minimum tax is equal to the sum of (1) 26 percent of so much of the taxable excess as does not exceed $175,000 ($87,500 in the case of a married individual filing a separate return) and (2) 28 percent of the remaining taxable excess, which is essentially an individual’s taxable income adjusted to take into account certain specified preferences and adjustments (also known as alternative minimum taxable income (“AMTI”)) minus the exemption amount.  To read this article excerpted above, please access http://www.advisorfyi.com/2010/12/obama-tax-cuts-alternative-minimum-tax-exemption-extensions/

Posted in Taxation | Tagged: , , , , , , , | Leave a Comment »

Dissecting the Obama Tax Cuts: Qualified Dividends and Capital Gains

Posted by William Byrnes on December 21, 2010


Why is this Topic Important to Wealth Managers? Yesterday we presented an overview of the Obama Tax Cut provisions that are relevant to wealth managers.  Today we begin by taking a closer look at some of the details of those provisions and how they relate to wealth managers and their clients.

Section 102 of The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (HR. 4853)provides for an extension of the regular and minimum tax rates for qualified dividend income and capital gains as were in effect before 2011.  The extension will continue for an additional two years.

To understand the impact of this provision of the new bill, it will serve the reader to understand what the regular and minimum tax rates in relation to qualified dividend income as well as capital gains means.  Read this complete article at AdvisorFYI

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Finance Committee Promises AMT Patch

Posted by William Byrnes on December 9, 2010


Ways and Means Committee, US Legislative Branch

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Record numbers of taxpayers will be subject to the 2010 alternative minimum tax (AMT) if Congress does not act by the end of the year. Congress has considered a number of possible AMT “patches” that would reduce the number of taxpayers subject to the AMT but has been unable to agree on the right approach.  Although Congress passes an AMT patch annually, this year’s patch is coming later than usual.

In a November 9, 2010, letter to the IRS’s Douglas Shulman, House Ways and Means and Senate Finance committee members said that the IRS should expect Congress to pass 2010 alternative minimum tax relief by the end of this year. The joint letter was signed by Finance Committee Chair Max Baucus (D-Mont.), Finance Committee ranking minority member Chuck Grassley (R-Iowa), acting Ways and Means Committee Chair Sander M. Levin, (D-Mich.), and Ways and Means Committee ranking minority member Dave Camp (R-Mich.).   Read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For in-depth analysis of the AMT, see Advisor’s Main Library: Section 19.D—Additional Taxes; Credits For Prepayments.

We invite your questions and comments by posting them below or by calling the Panel of Experts.

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