Does anyone have any strategies for AMT in 2018? I’m going to get hit by a huge AMT bill since my options have grown a lot and I’m in the 24% normal tax bracket. Any good way to get the money back? AMT credits seem like a mess.
The AMT you pay is essentially a prepayment of tax. You calculate your taxes both the normal way and the AMT way. Let's say the AMT tax number is $50K higher than your non-AMT. In subsequent tax years, you calculate your taxes both ways and pay the lower of the two. If you pay the number from the AMT method, the difference is subtracted from that $50K until you exhaust it. Source: Part-time accountant. And if the explanation is confusing, i highly recommend you hire one.
Also if you have decent credit and a good amount of options in a company that is expected to have a liquidity event in the near future, talk to the guys at ESO Fund. They pay your AMT as part of the loan needed to exercise your options.
What?? When do you ever get to pay lower of the 2?
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Where’s the AMT income coming from? Are you planning to exercise and hold?
I’d like to do that ideally, I won’t if it’s doubling my federal taxes (just calculated and it looks like it will)