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Itemized Deduction8
Alternative Minimum Tax/Recovery of Prior Year's Itemized Ded
| Question | Answer |
|---|---|
| What is the purpose of the alternative minimum tax (AMT) | The purpose of the AMT is to make sure that taxpayers with higher imcones cannot entirely avoid taxes through the use of certain deductions and credits |
| Thinking about the AMT why is it important for new clients to bring in their prior year's returns | New clients who might fit the criteria for being subject to AMT might have paid AMT on their prior year's return.It is possible that they might qualify for a credit on their current-year return |
| What is the most common taxable recovery | State income tax refund and if applicable local refunds |
| Under what circumstances is a refund of state income tax generally taxable | When the taxpayer itemized deductions for the year the tax was paid |
| Name two other types of recoveries that may be taxable if the taxpayer itemized | Medical expenses and casualty and theft losses |
Created by:
dawn2000
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