J.K. Lasser's Small Business Taxes 2023

CHAPTER 29Alternative Minimum Tax

• Alternative Minimum Tax Basics
• Deduction Limits for Alternative Minimum Tax
• Credit Offsets
• Minimum Tax Credit

Alert

At the time this book was published, Congress was considering tax changes that could affect 2022 tax returns and planning for 2023. Check the online Supplement in February 2023 at www.jklasser.com or www.BigIdeasForSmallBusiness.com to see what changes have been enacted and when they become effective.

Reducing regular tax is only part of the battle that a small business owner wages to increase after‐tax returns. Minimizing or avoiding alternative minimum tax (AMT) where applicable is another important front that must be addressed. Some business owners may find themselves subject to AMT if they have certain substantial deductions and/or credits. C corporations are not subject to the AMT in 2022, so the balance of this chapter refers to the AMT for individuals (i.e., owners of pass‐through entities). Starting in 2023, C corporations with book income over $1 billion may be subject to a 15% alternative minimum tax. It's estimated that only about 200 such corporations need to be concerned about this tax; it doesn't directly impact small businesses.

Alternative Minimum Tax Basics

Alternative minimum tax is designed to ensure that all taxpayers pay at least some tax. Years ago, with tax shelters and other loopholes, wealthy individuals and corporations often paid little or no tax. In an effort to make all taxpayers ...