As I said in my last column, I don't mind filling in my tax forms.* I can usually look at the 1040 forms and figure what is happening. If I am normally in a 33% bracket, I can tell that the tax is really at a marginal (incremental) rate of 36.8%, or whatever. But in the AMT, I cannot decipher my marginal rate.
I may get the nerve to go in and increment my income by $1000 and see what the real change is. But it would take me a couple of hours, and I'd have to be sure I was not making any mistakes in the first place. I'm guessing it's up near 38.9%, due to discontinuance of various exemptions.
The big trouble with the AMT is that it brings in so much money! Many congressmen have expressed their unhappiness with the AMT, but they recognize that if they want to reform it, they will have to find some other source of funding for the government. And, (R) or (D), nobody has a good idea how to do that.
I think I know what I'll do next year. I'll get my taxes all done in July, the best I can do it. Then, I'll turn in an advance copy to a good honest tax preparer and get his opinion if I have done everything right. If I've done anything wrong, I'll leave time to recompute and recopy them before August 15. I wouldn't trust the preparer to do them for me, but I'll look at what he has to say.
Is there any way to plan ahead and avoid paying AMT? Not very easily. There are discretionary expenses you can take in different times to minimize your conventional 1040 taxes. But that doesn't work well for AMT.
One thing you can do is avoid exercising a big stock option and getting hurt if the stock goes way down. I wouldn't mind exercising a stock option and having to pay taxes on my gains. But if I exercise and the stock goes down, I will have to pay AMT on the stock gain, even if there was a loss making the stock basically worthless. If I take an option, I always sell some of it, to make sure I don't take a beating, paying taxes on something that's worthless. Usually I prefer to sell old stock, of the same type, so I only have to pay taxes on long-term capital gains. At first when I started studying the AMT, I thought I would get screwed out of the 15% rate for long-term capital gains, but apparently not. So when will Congress do something about this AMT injustice? When enough people complain. Every year, more and more people are caught up in this net, and when enough complain, maybe we'll get some action. And if I sell this column 10 times over, maybe it will pay for my AMT bill. No, not really.
Hi Bob: ...I would like to know how you normally do the following: In some high-frequency circuits, for instance in resonant dcdc converters operating in the range of a few megahertz, it is necessary to look at current and voltage waveforms simultaneously. How do you ensure that the current and voltage waveforms have the same time delays so they can be compared?
- Javier Chivite (via e-mail)
- Pease: I don't use a current probe very much, but I guess you just put in a calibration test. For example, if you have a nice crisp voltage, put that on one probe, add a 1-k½ resistor to ground, and let the current probe see that current. If there is any delay, such as a few nanoseconds, you can easily see it and subtract it from ongoing measurements. Write a note on the current probe to help you remember it.
* ELECTRONIC DESIGN, Dec. 1, p. 20