by Carolyn Rothwell on January 5, 2012

The Impact: One-Year AMT Patches in your Financial Planning Programs


Easy Money and Golden Years include Alternative Minimum Tax calculations in the current year tax projections.  Golden Years includes AMT calculations on an ongoing basis, as part of the program’s detailed calculations to estimate the client’s tax burden each year.  

For several years, Congress has passed patches to reduce the impact of AMT by increasing the exemption amount.  The 2010 & 2011 AMT exemption amount was increased as part of a two-year patch set by the 210 Tax Relief Act.  The resulting exemption amount for 2011 was $74,450 for Married Filing Jointly and $48,450 for Single tax filers.  As of now, the 2012 AMT exclusion amount has not been “patched” and is set to revert to lower levels.

The AMT Exemption amount is currently set as $45,000 for Married Filing Jointly and $33,750 for Single tax filers for 2012 and beyond.  This means more of your client’s financial planning projections will include AMT.  

If Congress raises the AMT Exemption, we will update our calculations and a new version of TOTAL Planning Suite will become available to download.  If Congress provides a single year patch, the AMT exclusion amount will only be increased for the current year 2012.  The program does not assume any one-year patch will continue indefinitely (important for Golden Years users).  

If you want to eliminate or reduce AMT in your financial planning projections, you can use the Income Tax Data section to reduce the AMT income.  Under the Tax Data tab, choose AMT Preference Income Items and under the Tax $ column enter a negative dollar amount.  You can adjust the dollar amount to reduce or fully eliminate the AMT amount.

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Carolyn Rothwell

Carolyn enjoys spending her time building Money Tree Software's brand and products. Her experience creating and delivering financial plans for a full-service financial planning firm and supporting advisors working to provide the best planning to their clients as a Money Tree support member has provided an excellent understanding of the importance of financial planning.