1.11 Other Taxes

1. Alternative Minimum Tax (AMT) <Form 6251>

1) Computation of tentative minimum tax

Regular taxable income
+ AMT adjustments
+ Tax preference items
= AMTI
- AMT exemption
= AMT base
x 26% or 28%
= Tentative AMT Tax
- AMT tax credits
= Tentative minimum tax
- Regular income tax
= AMT


2) AMT adjustments
(1) Timing differences
a) Passive activity losses
b) Accelerated depreciation: 40-year SL / 150% declining balance
c) Net operating loss
d) Installment method
e) Contracts (long-term)
(2) Itemized deduction (adds back)
a) Taxes
b) Standard deduction

3) Tax preference items (adds)
a) Private activity bond (Tax-exempt interest)
b) Pre-1987 accelerated depreciation on real property
c) Percentage depletion deduction

4) AMT exemption

5) AMT tax credit

6) Credit for prior year minimum tax
(1) Offsets the regular tax (excess tentative minimum tax)
(2) Forever carryforward
(3) Limitation on credit

2. Employee FICA Tax (Medicare and Social Security Tax)

Employer & Employee: (6.2% Social Security Tax + 1.45% Medicare Tax ) x 2 = 15.3%

3. Self-Employment Tax <Schedule SE>

15.3% (50% above the line deduction)

4. Additional 0.9% Medicare Tax

More than $125,000 (MFS), $250,000 (MFJ), $200,000 (Other) of medicare wages (box 5)

5. 3.8% Medicare Tax on Certain Unearned Income

High-income taxpayers to Net Investment Income Tax (NIIT)