Hit with AMT?
Did you get hit with AMT (Alternative Minimum Tax) for 2017? I prepaid by 2017 property tax for deductions but it didn’t matter since I had to pay AMT anyways.
Correct. I asked my accountant about pre-paying taxes and he advised me not to because of AMT. Knee-jerk reactions will usually result in self-inflicted pain. Plan carefully next time!
Chillax bro. No pain here (just love). AMT is a carryforward credit. It’s there next year for you. And property taxes need to be paid anyways. If you have the cash, might as well pay them early.
You get a tax credit for Alternative Minimum Tax paid in a prior year. The catch? You only get a credit for tax paid on deferral items, such as depreciation or realizing the value of stock options. Excluded deductions such as property and state income taxes that may have triggered the AMT cannot be factored into the AMT credit. Read more at https://www.kiplinger.com/article/taxes/T055-C000-S001-the-alternative-minimum-tax-credit.
Mine told me to pay even with AMT making it a wash but said the benefit would be suspended, generating an AMT credit for future use. Not sure exactly what they means but trust my CPA.
Yes, it’s a carry forward credit.
Congratulations. You’re doing better than most. Or you need to get better at tax planning. But kudos!