New 2018 AMT tax law and Roth conversions
My question is about the alternative minimum tax law when considering converting a traditional IRA into a Roth IRA. My understanding is the AMT is used to prevent using large itemized deductions to reduce your tax liability. If income is above a certain amount, the inclusion of deductions is reduced. The new tax law increases the standard deduction. If a tax payer uses the standard deduction (so there are no itemized deductions), does that mean the AMT will no longer be a part of the tax liability calculation?
Permalink Submitted by Alan - IRA critic on Fri, 2017-12-29 20:36
Not necessarily. The AMT exemptions for single and joint filers has been increased around 30%, and that should shield more people from the AMT. However, it is still there for some people, even those using the higher standard deduction.