Re: AMT when income 40K
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New Member

AMT when income 40K

Why is it picking AMT when income is 40K?

which causes

10K tax when total income is 40K?

 

22,000 1099-G

18,000 1099-DIV

 

Annual totals 1095-A:

A: 10,573

B: 10,181

C: 8,800

 

 

 

 

3 Replies
Employee Tax Expert

AMT when income 40K

The 2020 AMT exemption is $72,900 for a single filer and $113,400 for a married couple filing jointly.

 

Several things could trigger AMT, including:

  • Having a high household income - If your household income is over the phase-out thresholds and you have a significant amount of itemized deductions,
  • Realizing a large capital gain - Long-term gains (e.g. when you sell a home or other investments for a profit) are taxed at the same rate under both systems, but capital gains could put you over the AMT exemption threshold. That could cause the AMT to kick in, which means you may not be able to deduct state income taxes you paid.
  • Exercising stock options Exercising qualified employee stock options (also called incentive stock options or ISOs) to buy stock at a discounted price is normally not a taxable event until you sell the shares for a profit. The AMT creates a paper profit that’s taxable even though it’s not a real profit until you sell the shares.

For additional information, please see the following articles:

[ I am puzzled by your "1095-A" figures.  Form 1095-A is the Health Insurance Marketplace Statement.]

 

 

New Member

AMT when income 40K

I don't think I described  the problem properly:

 

The unemployment + dividend income is far below AMT.

 

Why is turbotax picking AMT given that the income is so low?

 

("1095-A" figure is there to show all inputs to turbotax.)

 

Employee Tax Expert

AMT when income 40K

Since your income is below the AMT exclusion and you don't have any of the situations I mentioned in my previous reply, the AMT should not be activated.  I suggest you use the Clear & Start Over function and reenter your information.

 

If you have not paid for the online edition you are using, have not filed your tax return, or registered the Free edition, then follow these steps to clear your return and start over:

  1. Click Tax Tools in the black bar on the left side of the screen
  2. Click Clear & Start Over.
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