AMT Exemption Is Permanent with Tax Relief Act
One of the permanent changes brought about by the American Taxpayer Relief Act of 2012 is the Alternative Minimum Tax (AMT) exemption. Another is that the exemption is now indexed for inflation. Both of these are good news for taxpayers and advisors trying to plan for the future.
Similar to the regular tax personal exemption, the AMT also has an exemption amount. However, when the AMT was created in 1969 the exemption amount was not permanent, nor was the amount indexed for inflation. In recent year’s Congress did not pass new legislation to extend or increase the exemption until very late in the year. Sometimes, like this year, the new legislation was not passed until after the tax year had actually ended. Without the exemption being indexed for inflation, it was difficult to determine who would be subject to the AMT each year. Both of these issues added uncertainty to the tax planning process for millions of taxpayers and their advisors. Fortunately, we can now remove both of these uncertainties to future tax planning thanks to the permanent changes in the “American Taxpayer Relief Act of 2012.”
Ifyou have any questions about this exemption or any other piece of the new Tax Relief Act please feel free to call 802.878.1963 or email [email protected]. Davis & Hodgdon Associates has been assisting businesses and individuals in the Burlington Vermont Metro area with their tax planning for more than 20 years.