Question

Determine the tax due, including the alternative minimum tax, for Sally Jenkins, assuming she is single using the following tax information : TAX YEAR 2020

- Adjusted Gross Income= $100,000

-Itemized Deductions= 20,000

-Alternative Minimum Tax Itemized Deductions= 12,000

- Tax Preference items = 40,000

-General Business Credit = 17,000

*please include notes/formulas on how to get to the answer so I can take good notes.*

Answer 1

Note : Here tax calculation have been done as per latest IRS rates and Exemptions available in Wikipedia.

Calculation of Regular Income tax
	Figures in $
Particulars		Amount
Adjusted Gross Income		100000
Itemized Deduction		-20000
Taxable income		80000
General Business tax credit		-17000
Reduced Taxable Income		63000
Tax Calculation
First $ 9075 (10%)	907.5
From $ 9075 to $ 36900 (15%)	4173.75
From $ 36900 to $ 63000 (25%)	6525
Total regular Tax due		11606.25

Calculation Alternate Minimum Tax
	Figures in $
Particulars		Amount
Adjusted Gross Income		100000
AMT itemized deduction		-12000
Tax Preference items		0
(doesn’t exceed 40% of Adjusted gross income)
Taxable amount		88000
AMT Exemption		-51900
Taxable amount		36100
Tax Calculation
$ 36100 (26%)
Alternate minimum tax		9386

Answer : Each year a taxpayer must pay the greater of an alternative minimum tax (AMT) or regular tax. So here tax due will be $ 11606.25

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