Getting More From Your 2004 Return

Unless you're willing to move to Texas or Florida or get rid of the kids, you're stuck until you start making the big bucks and move out of this AMT purgatory.

If you're in AMT because of a particular event or if you know your situation will change in the future, then there's some hope.

Let's say you plan on exercising some incentive stock options in 2005. You can't really say "ISO" without saying "AMT" in the same breath, so prepare yourself for it.

In that case, try to defer any deductions that you know will be disallowed under the AMT to 2006. So try to pay your December state and local tax bill in January 2006, consider waiting until next year to take out that home equity loan -- since that interest is disallowed -- and try to push off your miscellaneous itemized deductions as well.

Those are just some of the things you can do to save yourself from the AMT ogre. But be sure to talk to a professional for more planning suggestions.

Save Your Receipts

Finally, if you have a big purchase coming up, like a car or a wedding, be sure to start saving all your receipts. You may be better off deducting your sales tax instead of your state and local income tax in 2005, so keep your documentation just in case.

I know the last thing you want to be thinking about is next year's tax return, but making a few adjustments now might make you much happier next April.

>To order reprints of this article, click here: Reprints