1099-R and AMT

[Terry]

Potential client comes in.
He is single, 62 yrs old, retired May 2010.
Using rounded numbers:
W-2 wages $27000
Rollover distribution of $106,000 into an IRA
Taxable distributions of $86,800 from IRA
Bought home in 2010 $160,000
Mortgage interest $2200
Social security $9900
Federal withholding from all sources (1099's and w-2) $14,100
I show he owes $11,400 (including under payment penalty of $200).
Am I missing something? His advisor told him 10% withholding on the IRA's would be sufficient.
Also, would he, for any reason be subject to AMT? He did not have any distributions in prior years from what is now an IRA.
Any input would be appreciated.
And since everyone is asking, what would you charge? haha
Thanks,
Terry

[DonPriebe]

That's what I get also. But ...

His standard deduction is $5,700. He already has $2,200 in mortgage interest and you haven't mentioned any property taxes. Look at the closing statement if he hasn't paid any directly yet. Donations to charity? When people move into a new house sometimes they get rid of some old furniture that doesn't fit in, etc. Of course even if he can itemize, you're probably not going to same that much. With the IRA distribution he's in the 28% bracket, and 85% of his SS is taxable.

His regular tax is about $2,300 more than the AMT at this point.

[Terry]

Thanks

Thanks, Don, for the reply.
I had thought about itemizing, and I have him bringing in his closing statement, but I don't think he's going to have enough to itemize.
Thanks, again, for your reply.

[taxmom34]

why would advisor think that withdrawing $86,000 will put this guy in the 10% tax bracket?, maybe he should go back to tax school.