Alternative minimum tax - use sales tax instead of state income tax?

[LCP]

Ultratax is giving a suggestion to force the sales tax deduction instead of using state income taxes. The total tax is the same with the regular tax being higher and the dif due to the alt min tax being less.

Is that because next year the state refund will not be taxable?

Is there any other reason?

[Matt Sova]

Yes

At least that is all I can think of.

[JG EA]

Amt

Take the State into consideration. Getting rid of a deduction may work for federal, but in every case I've checked on with my clients keeping bigger deductions in worked better for overall tax savings.

[veritas]

Sometimes not itemizing altogether can lower the tax liability when amt is an issue.

[JG EA]

Not as a rule though.

Taking just the Federal return into consideration - If you itemize with items that are allowable (contributions for instance) you can save tax dollars. This "tip" is even in the 6251 instructions. The reason is if you have some itemized deductions even if below the standard and they are allowed, well they are allowed. Whereas none of the standard deduction is allowed.