AMT for 18 year old first time filer earning $3283

[GeneInAlabama]

I am filing a return for an 18 year old first time filer who is a dependent. The program is trying to charge him $900 AMT!!!

I updated my forms and still get the same results. I closed the program and reopened and still get the same results. I deleted the 6251 and everything is OK now, but why was it figuring the tax? I went through all the worksheets line by line the best my befuddled mind could do and information seemed to be carrying over to where it should except the final result HAS to be wrong. There is no way an 18 year old kid with that amount of W2 wages and no other income except $210 social security could owe AMT. I know tax law doesn't always make sense, but this is ridiculous.

Also, on the same return the state is showing $3,031 taxable income but no tax due. He is getting a full refund on the state.

Maybe my computer has gotten the swine flu.

[PapaJoe]

Gene, I don't know about your AMT on the federal return, but you know that on an Alabama state return with taxable income of any amount you would have a state income tax due. Maybe your computer does have swine flu.

[Lion EA]

And, the AMT exemption for a dependent is a VERY small number compared to the exemption for all the other filing statuses.

[GeneInAlabama]

Gene, I don't know about your AMT on the federal return, but you know that on an Alabama state return with taxable income of any amount you would have a state income tax due. Maybe your computer does have swine flu.

That's why I couldn't understand why the Alabama return showed no tax due but showed taxable income. Of course, when I did an override and put in the standard deduction and personal exemption, he had a negative taxable income. I don't know why I had to do an override. Weird things are happening today. Maybe I need to go back to bed.

[Lion EA]

Why does he get a personal exemption if he's a dependent?

[GeneInAlabama]

Why does he get a personal exemption if he's a dependent?

In Alabama, both the parent and the dependent can claim the personal exemption. It is a small perk the state gives us, but it doesn't amount to that much. The parent can claim $1,000 for depencents and the the dependent can claim $1,500 on his own return as a personal exemption. Until a year or two ago, the parent could only claim $300 for each child. The Alabama return is totally separate from the federal. You can file one and not have to file the other.

[GeneInAlabama]

And, the AMT exemption for a dependent is a VERY small number compared to the exemption for all the other filing statuses.

Lion, according to the worksheet, the AMT exemption for a dependent is $6,400. I prepare VERY few returns that have AMT and each time I do, I have to struggle through the 6251 line by line.

I prepared the return on Tax Wise and it didn't charge AMT. (I originally purchased the $299 TRX program, but when they substituted the Tax Wise program, I tried it and didn't like it, so I bit the bullet and purchased the ATX Max program. I bought the ATX TRX program for next year and hope it doesn't get substituted again.)

[Cathy]

Gene,

Sounds like the filing status box has not been checked....don't ask how me I know.....been there, done that!

Cathy

[GeneInAlabama]

Filing status was checked for single.

[Cathy]

Filing status was checked for single.

Hmmmmm....I entered $3,500 in income with a 6251 added to the return and without checking the single filing status, the amt was $910. That's eerie, to say the least!

Cathy

[GeneInAlabama]

I'm glad that it's not just my computer. Or, maybe your computer has the swine flu too! Did the AMT change when you added the filing status. I think at the beginning, I didn't check the filing status, but when I went back and checked it, the AMT was still there. I wonder if not checking the filing status at the very beginning could have anything to do with it?

[Cathy]

I'm glad that it's not just my computer. Or, maybe your computer has the swine flu too! Did the AMT change when you added the filing status. I think at the beginning, I didn't check the filing status, but when I went back and checked it, the AMT was still there. I wonder if not checking the filing status at the very beginning could have anything to do with it?

Gene,

Can't remember how I did it the first time.....but when I go back to the return now and uncheck single...the amt pops up....then when I check single....no amt.....can keep on doing this at this point in time.

Cathy

[Cathy]

Gene,

Also, it makes sense as no "exemption" amount is included on line 30 of the 6251 if no status is checked....so all of the income would be taxable for amt.

Cathy

[GeneInAlabama]

Thanks Cathy, I added back the 6251 and everything is like it is supposed to be now. I can check and uncheck the status box and the AMT appears and disappears like it should. Now, as I type this message, the letters quit showing up as I type, and then all of a sudden they will appear all at once. Something seems to be going on with my computer.

Thanks for your help.

Gene

[Cathy]

Gene,

No problem...was glad to have helped. I don't check the status box a couple of times each year when I have a new client.....at least it gives the heart a couple of extra beats and gets the blood flowing a bit more!

Cathy