individuals who incur an alternative minimum tax liability attributable to timin
ID: 383314 • Letter: I
Question
individuals who incur an alternative minimum tax liability attributable to timing differences are entitled to a credit against their regular tax liabilities incurred in future years, and gives a brief conceptual description of how the credit is computed.
What form is used to compute the amount of the credit earned by an individual for a taxable year?
What is the formula used on that form to compute the amount of the credit earned? Describe in enough detail so that the reader can understand what the form is intended to accomplish.
According to the IRS forms, what items are considered to be permanent differences between regular taxable income and alternative minimum taxable income, so that AMT attributable to those items does not produce the credit? List these items and describe them in detail.
Please answer each question in complete sentences, and cite name and number of the IRS publication or form/instruction where you found each answer, and the page number on which the answer is found.
Explanation / Answer
for this filling form need to fill 8862 is required.
2.https://www.irs.gov/pub/irs-pdf/i8862.pdf
https://turbotax.intuit.com/tax-tips/tax-deductions-and-credits/filing-tax-form-8862-information-to-claim-earned-income-credit-after-disallowance/L72KlOICt
Due to changes in the law, the refundable credit re certification requirements have been expanded to also cover the child tax credit (CTC)/additional child tax credit
(ACTC), and the American opportunity tax credit (AOTC). Form 8862 has been revised to account for these changes. Completing the form is not a substitute for actually completing all required forms and schedules for each credit you claim when preparing your return.
standards must be met for you to claim the EIC:
You must be a citizen of the United States, and must live in the U.S. for more than half of the year.
You must have earned income for the tax year and a valid Social Security number (SSN).
You can't be a qualifying child on another return.
You can't use the married filing separate (MFS) filing status.
Eligible taxpayers may claim the credit either with or without a qualifying child. Taxpayers without a qualifying child must be at least age 25 and under age 65 and not be a dependent or a qualifying child of another. Income limitations also apply. Income guidelines for the current tax year are listed in Publication 596: Earned Income Credit.
3.Under the tax law, certain tax benefits can significantly reduce a taxpayer's regular tax amount. The alternative minimum tax (AMT) applies to taxpayers with high economic income by setting a limit on those benefits. It helps to ensure that those taxpayers pay at least a minimum amount of tax.
The AMT is the excess of the tentative minimum tax over the regular tax. Thus, the AMT is owed only if the tentative minimum tax is greater than the regular tax. The tentative minimum tax is figured separately from the regular tax. In general, compute the tentative minimum tax by:
1. Computing taxable income eliminating or reducing certain exclusions and deductions, and taking into account differences with respect to when certain items are taken into account in computing regular taxable income and alternative minimum taxable income (AMTI),
2. Subtracting the AMT exemption amount,
3. Multiplying the amount computed in (2) by the appropriate AMT tax rates, and
Subtracting the AMT foreign tax credit.
4. The law sets the AMT exemption amounts and AMT tax rates. Taxpayers can use the special capital gain rates in effect for the regular tax if they're lower than the AMT tax rates that would otherwise apply. In addition, some tax credits that reduce regular tax liability don't reduce AMT tax liability.
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