An arcane levy extends its reach

Nation's Business, Nov, 1997 by Joan Pryde

"I would rather not base my practice on just doing taxes, but on helping people plan their financial future," Horton adds.

Unless Congress takes action to ease the AMT problem, though, crunching more numbers is exactly what she will be doing. And many other small-business owners will be doing the same, or paying their accountants to do it for them.

Figuring Your AMT Vulnerability

For most people, there is no income threshold or simple test that lets them know beforehand if they are subject to paying -- or even subject to calculating -- the alternative minimum tax, according to tax experts.

Even the Internal Revenue Service acknowledges as much. Under the heading "Who Must File" in its AMT instructions, the only guidance the IRS gives is to complete Form 6251 -- the form for calculating the AMT -- "to see if the AMT applies to you" for a given tax year.

About the only guarantee is that if your annual income is less than the AMT exemption amount -- $33,000 for single taxpayers and $45,000 for married couples filing jointly -- you don't have to worry, says Susan Jacksack, a small-business analyst for CCH Business Owners Toolkit, an online information source for small-business owners.

Anyone who has income above those amounts "should do at least a very basic AMT calculation," says Jacksack. She recommends using a tax software program to crunch the numbers if you don't want to figure the AMT yourself Various tax programs will run the calculation for you and print out Form 6251 if you owe the AMT.