alternating tax exemptions for divorced parents

alternating tax exemptions for divorced parents

Alternative Minimum tax planning ideas ... Personal exemptions

A personal exemption deduction is allowed for a taxpayer, the spouse and dependents such as children and other relatives. The amount for 2009 is $ 3.650 for each waiver, but this amount is reduced if the taxpayer adjusted gross income (AGI) exceeds a certain amount.

In calculating the alternative minimum tax, however, allows the deduction of personal exemptions. Thus, the AMT taxable income will be higher than regular income tax liabilities by the number of exemptions claimed. For example, a married taxpayer with two children would receive a tax deduction of $ 14,600 due to these exemptions. If tax This ordinary income family was $ 100,000, the AMT revenue would be $ 114,600.

There's really nothing you can do to change the effect AMT exemptions from the law of personal tax for the taxpayer and his spouse - it is just that the effects of the AMT. However, if dependent, there are situations where that may be planning opportunities to save taxes within the family unit.

An example is that if the dependent is a child, a child or other family income, but nevertheless, the taxpayer continues to provide substantial support. To see who offers more half of the person in charge of media - the test of basic eligibility for the exemption - if you look at the income of the person in charge is or is not devoted to their own needs. For example, if the child attends college and in at work, regardless of their income spent behalf in support of your eligibility for exemption. Although students of tax assistance the more likely it was less than parent-taxpayer "means any tax advantage is certainly better than zero profits tax on parents is increasing because of the AMT.

Another example is in the case of divorced or separated, who may or may not have executed a multiple support agreement. The tax rules essentially allow the parties agree that they will be child's personal exemption. Planning here is simple, assuming that the lines of communication remain open between the parties - if you're in the Alternative Minimum Tax, but the other not, why not organize to give, not deduction AMT exemption?

About the Author

George Bauernfeind is with AMTIndividual, providing analysis, customized strategies, and an online dual tax calculator / planner to help you reduce your Alternative Minimum Tax. Visit http://www.amtindividual.com or http://www.amtblog.com for access to this tax software and to read more tax planning articles on the Alternative Minimum Tax.

EEP100 - Lecture 1

 

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alternating tax exemptions for divorced parents

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