In 2017, Zachary incurs no AMT adjustments, and his only AMT preference (which is also his only itemized deduction) is $42,000 of state and local and real property taxes

Question

If Zachary were a single taxpayer who itemized deductions and had taxable income of $95,000, his regular tax liability would be $19,582 and his AMT liability would be $22,555.

Assume instead that Zachary is a married taxpayer filing jointly in 2017 . The couple's taxable income amount is changed only by the additional personal exemption. In comparison to the tax liability amounts presented above, the couple's regular and AMT tax liabilities would be:
a. Higher, Higher
b. Higher, Lower
c. Lower, Higher
d. Lower, Lower

Answer 1

d
RATIONALE: Because aggregate income and deduction amounts will not change, a married couple in this scenario will pay less regular tax and less AMT. The lesser amount of regular tax liability is attributable both to the additional personal exemption afforded to the couple and the fact that the regular income tax brackets are lower for taxpayers married filing jointly than single taxpayers with comparable incomes. On the dimension of AMT, while both the single taxpayer and the couple in this scenario would be in the 26% AMT bracket, the AMT exemption is larger for married taxpayers. The additional personal exemption added back in the couple's AMT calculation does not significantly offset that benefit.