[frommagio]

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I went to go see a tax professional today. ... but I told him that that was the wrong way to do it.

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1) The fact that you have to tell him, that would make me nervous.

I then asked a accountant who works for a high powered NYC area firm –

“the tax seems high. . . .but is there other income . .. and the amt doesn't make sense if the total income is the 60,000

the amt doesn't make sense if the total income is the 60,000 and there has to be other items affecting the amt.

unless it is calculating self employment tax on the winnings - - - ???
”

I know this does not help. But it is what I got back.

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AMT is a lot more complicated than that - unfortunately, your 'second opinion' accountant from a high-powered NYC firm is also talking crap.

AMT is a completely parallel tax system. Technically, everybody needs to calculate their taxes under both systems - if it's a big enough difference, you need to pay AMT. It's that simple. Originally designed for very high rollers, it has not been indexed for inflation, so unfortunately, an increasing number of "normal folks" are being caught.

Some of the things that can drive you into AMT: lots of income, large deductions (high-tax states), etc. Under AMT, you pay a flat rate on all income, and you lose your deductions. It's pretty nasty, really.

Remember Bush's tax cut of a few years back, how "everybody who pays taxes received a tax cut"? Well, it was true - for everybody except those citizens who were in AMT.

The club is getting bigger all the time.