Hi, I’m Tom Lo with Vested Financial Planning. I’m here to help you understand what AMT is.
AMT is Alternative Minimum Tax and the way I help clients understand AMT is that you can think of it as a parallel tax calculation. Every time you do your taxes, it gets calculated ordinary income, and also with AMT, whichever one is higher is the one you end up paying.
The key thing to understand about AMT is it treats different types of income differently. In particular ISO income, you get taxed for AMT, but you don’t for ordinary income. That’s why it’s important if you exercise ISOs, you often end up paying AMT.
So if you want to learn more, come to my website at vestedfinancialplanning.com. Thank you very much.
After 20 years working for companies including eBay, Yahoo!, Intuit, and startups, I made a career change into the financial world as a fee-only financial planner 9 years ago. I earned my CFP®, spent a few years at a boutique fee-only firm in San Jose, worked 2 1/2 years at a leading wealth management firm in San Francisco, and then left to build the firm I wish had existed when I was working as a tech professional.
My mission is to help other Silicon Valley professionals make the most of their employee equity to help them reach their financial goals.