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[Solved] Possible problem with 3.9.1 and AMT calculation?

 

David Justice
(@ilovemybeagles)
Eminent Member Customer
Joined: 5 months ago
Posts: 26
Topic starter  

I downloaded PRC2021.3.9.1 last night (thanks for the enhancements!). Unfortunately, I shortly noticed some pretty substantial deviations from the 3.8.2. version of my model. Now hopefully this is just a complete false alarm, but I did want to report a couple of obvious things I noticed in case they might represent a problem in the new release. As for approach, I generated an Export File from 3.8.2 and then opened the same file in 3.9.1. I also made sure I was inspecting the same Scenario in both versions. Following is what I observed (Mac version, Excel 2019, Version 16.53)...

Firstly, I see newly calculated amounts of “Alternative Minimum Tax (AMT)” in 3.9.1 whereas in 3.8.2 I had none. This rang a bell as I had noticed AMT tweaks mentioned in the Gold Change Log. As I understand it, AMT kicks in only when reaching a certain income level, which I do not reach in the applicable years of my model. Yet the tax is calculated anyway. And what looks even stranger is that the calculated AMT amount is fully 66% of my “Federal Taxable Income”. Now that’s a tax! Maybe a coincidence, but the AMT is calculated in all but one year where an “ACA Subsidy Amount” is also applicable.

Secondly, and possibly related to the AMT anomaly, is that the “optimized” Roth Conversions projected in 3.8.2 throughout most of my pre-RMD years are in 3.9.1 eliminated after Age 65 and furthermore reduced by 75% in amount in those pre-65 years. In other words, conversions went from a total of hundreds of thousands to tens of thousands. I did re-click the Roth Conversion “Optimize” button after opening the Export file under each version just to make sure I was comparing apples to apples.

So, in short, moving from 3.8.2 to 3.9.1 resulted in a drastic reduction in my Roth Conversions and my associated AGI, with AMT newly appearing on a much smaller “Federal Taxable Income”, and at a rate of about 66% of that Taxable Income. Not sure if something has gone awry, if I have a corrupted Export file, or if I am otherwise doing something wrong (wouldn’t surprise me). But I did want to let you know - and also to solicit others’ feedback if they may have observed something similar.


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Stuart Matthews
(@smatthews51)
Member Admin
Joined: 1 year ago
Posts: 230
 

David,

I did discover a problem in the modified AMT calculations which have been fixed (hopefully) in 2021.4. So, please check that out and let me know how that looks.


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David Justice
(@ilovemybeagles)
Eminent Member Customer
Joined: 5 months ago
Posts: 26
Topic starter  

Good news! My current model loaded into Version 4.0 matches 3.8.2, with the strange results I was seeing in 3.9.1 gone (Roth conversions have returned, AGI/Taxable Income has reverted, and the unexpected AMT is eliminated). I did notice something I had completely overlooked earlier. In 3.8.2, I did have very small AMT calculated for Years 80/81, in addition to Federal Income Tax, but those small AMT amounts are gone under 4.0. Presumably, this is the correct and intended result of your AMT calculation modifications. I'm good to go.

Thanks again for your stellar turnaround time!


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