Somehow this year I hit some AMT threshold (grrr) and now my $$$$ property taxes no longer make much if any dent in my federal tax. Does this sound right? I'm using TaxCut software (have been successfully for years).
That's what the AMT does. If you meet the criteria, your taxes are recalculated with restrictions on deductions. People who live in high tax states really suffer when those deductions go out the window.
Welcome to the club. I don't think I'll get hit with it this year, but I have been in the past.
I was wrong. I just finished doing my federal return in Turbotax, and I got hit with the AMT for 2005. It cost me about $1,400 over what I would have paid with all of my regular deductions.
Rats. That's what I get for living in a high tax state.
I am still trying to understand this AMT tax. I just did my taxes and it said with the information I just put in I do not have to pay it, what ever IT is.
AMT is Alternative Minimum Tax.
It was originally passed to catch very high income earners with a lot of deductions.
It was not indexed for inflation, and as incomes have risen more and more people are falling under its umbrella.