AMT Exemption & Phase Out - 2009

AMT tax is a parallel tax that aims to tax the wealthy taxpayers who have lower regular tax liability due to preferential tax benefits.
To calculate AMT-
· Itemized deductions allowed under the AMT are mortgage interest used to buy, build or improve your home, charitable contributions, casualty losses, medical expenses in excess of 10% of adjusted gross income (AGI), the deduction for sales and excise taxes on qualified motor vehicle purchases after February 16, 2009, and miscellaneous itemized deductions not subject to the 2% of AGI floor.
· Personal Exemptions are not allowed but the AMT exemption is allowed.
· AMT Exemption that is allowed for 2009 from the AMTI income:
o Married Filing Jointly and Qualifying Widow(er): $70,950
o Single and Head of Household: $46,700
o Married Filing Separately: $35,475
· As with every exemptions there is phase-out rules for the AMT exemption. The phase-out range is based upon alternative minimum taxable income (AMTI). The AMTI phase-out ranges for 2009 are as follows:
o Married Filing Jointly and Qualifying Widow(er): $150,000 to $433,800
o Single and Head of Household: $112,500 to $299,300
o Married Filing Separately: $75,000 to $216,900
· Tentative AMT is calculated as 26% of the AMTI upto $175,000 and 28% on the balance.
· If the Tentative AMT is greater than the Regular tax liability than the difference is the AMT tax liability.

IRS announces 2010 standard mileage rates

Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
50 cents per mile for business miles driven
16.5 cents per mile driven for medical or moving purposes
14 cents per mile driven in service of charitable organizations
Source: www.irs.gov