High marginal tax rates encourage tax avoidance and penalize work and saving.

Other tax software should have similar tax planning tools. To avoid or reduce AMT, sell the stock in the year of exercise, or spread the exercise over a number of years. Those held for one year or less are considered short-term and receive no preferred tax treatment. If you wish to use this content in any manner, you need written permission.

It's very possible that these personal exemptions, coupled with some other tax issues, could introduce her to the AMT. Relatively few individuals currently are subject to the AMT. Before exercising incentive stock options ISOs, use tax planning software or consult a tax pro to calculate the tax consequences. You're likely not familiar with all of the issues surrounding the AMT. If you have any of these issues on your tax return, or any combination of them, you could have the unpleasant obligation of paying the AMT. There are two AMTs, one for individuals and the other for corporations. High marginal tax rates encourage tax avoidance and penalize work and saving. Returns receiving zero or less than full credits 12. Returns receiving zero or less than full education credit 5.

Of course, you can't tell just by looking at a list whether or not you will be subject to AMT. Be sure to read the list of exceptions provided with the work sheet. If the work sheet indicates that you are potentially subject to the AMT, complete Form 6251. Returns receiving zero or less than full child credit 15. Several changes have been made to the depreciation adjustment. Make a large cash contribution to your favorite charity. If you claim or have received any of the items on the list, you must fill out and file a Form 6251 even if the calculator or work sheet indicates you are not subject to AMT.