Question

Assume for a moment that you own a tax practice and the majority owner of Hastings Printing, Corporation (your client), informs you that she has recently heard about the alternative minimum tax (AMT) and wants you to be sure to check if that tax can save the owner of the company money on her personal tax return. Respond to that statement and discuss your thoughts on the reasons for, and the appropriateness of, this AMT.

Answer 1

The Alternative Minimum Tax (AMT) is associate degree taxation obligatory by the US. centralized on people, companies, country estate, and expectations. AMT is obligatory at a virtually flat rate on associate degree accustomed quantity of nonexempt financial gain higher than an exact threshold (also referred to as exemption). This exemption is well more than the exception from systematic taxation.

Regular taxable revenue is settled for certain things calculated otherwise for AMT, appreciate depreciation and health expenses. No reasoning is permissible for national taxes or various detailed deductions in calculating AMT financial gain. Taxpayers with revenues higher than the exemption whose fixed National taxation is lower then the number of AMT should pay the upper AMT expanse.

A firm which will claim a further first devaluation deduction underneath section 168(k) canister opt for instead to rush the utilization of its previous year minimum tax acknowledgements, giving the accelerated acclaims as refundable credits. Companies creating this section 168(k)(4) voting and requesting a refund of previous year smallest tax acclaims ought to complete kind 8827. These companies are going to be informed that some of their requested reimbursement was focus to the appropriate discount.

Companies creating the section 168(k)(4) appointment however not demanding a refund of previous year minimum tax credits aren't subject to the current reduction.

From this we can perceive that the choice Minimum Tax will save the Firm cash .

Answer 2

Answer: The answer is provided below

Step-by-step explanation:

The majority owner of the Hastings Printing, Corporation is interested in seeing whether the alternative minimum tax would help save the corporation money. The regular income tax excluded some kinds of income, provide deductions and also credits for certain expenses.

Alternative minimum tax is for the individuals and corporations which benefit from certain deductions, exclusions or credits and pay at least a certain minimal amount of tax. On the premise of the information gathered, I will to talk with my client in order to make sure that they know what AMT refers to. This is a tax which could make them pay more on taxes.

Alternative Minimum Tax will go through to make sure the firm paid enough taxes although they might have received a tax benefit. Their file will be reviewed by me to determine if there are other ways to lower their taxes.

Depending on the size of the firm, they are required to pay 20% and this could mean the company will lose the tax credits or the deductions they earned before and may have to pay more taxes.