Getting screwed by the Tax Man in MN

[pudley4]

Alternative Minimum Tax

Relevant excerpts:

As people sit down to calculate their income taxes for 2005, an estimated 65 percent of married couples with incomes between $75,000 and $100,000 with two or more children will find that they have to pay the federal AMT, which disallows many common exemptions and deductions people rely on to lower their taxes, such as for dependents, property taxes and state income taxes.


It won't be long before I'm in this range

One of (a CPA's) clients regularly played high-stakes slot machines at a Minnesota casino and eventually accumulated $637,000 worth of W-2G forms, which casinos issue (and report to the IRS) for jackpots of more than $1,200. But overall, the man lost at least $60,000 more than he won betting on the slots.

"He knew the overall rule, that you can deduct your losses up to the amount of your winnings," Daleiden said. "But that's not true on the Minnesota AMT tax calculation -- you have to pick up the $637,000 in income, but you don't get any deduction for the losses."

Bottom line: The man owed the state $42,000 under the AMT.

"He was in disbelief," Daleiden said. "The theory behind paying an income tax is that you pay it based on income you have. Here, he not only didn't have the income, he had losses, and so he had to borrow the $42,000 in order to pay these taxes."


This is where us poker players (in MN) could get screwed

Oh, and one more thing:

Congress voted to repeal the AMT in 1999, but President Clinton vetoed the measure.

Bastard

[pudley4]

use the following login:

ID: pokerguest
passwrod: pokerguest