The alternative minimum tax (AMT) was created in 1969 to ensure that wealthy Americans could not deduct their way out of paying taxes. But the AMT was never indexed for inflation—so millions of families now are being hit by the tax formula, which calculates a higher tax due than the standard calculation, just living in a high-tax state with two or more children can put you in AMT territory.
WHAT TO DO:
If you think you’ll qualify for the AMT, visit a tax professional, who can run calculations carefully and advise on ways to minimize the tax. For example, you may be advised to lower your taxable income before year’s end by contributing the max to retirement plans, flexible-spending and health-savings accounts, and charities. You also may need to review whether you hold municipal bonds in taxable accounts—the interest from the bonds are not exempt from the AMT.

  Is your favorite charity on the level?
Before writing a check to a charity, be sure that the organization is legitimate and financially committed to its cause. What to check:

Tax status.
Verify that the IRS recognizes the organization as a charitable group. Go to www.irs.gov and type “search for charities” (online version of Publication 78) into the search field.

Commitment.
Before you give money, take a look at how much money a charity uses to cover administrative costs vs. how much goes toward its cause. Three watchdog groups: www.charitywatch.org, www.give.org, and www.charitynavigator.org.

Legitimacy.
Check the charity to be sure it’s the one you had in mind. Some charities have names that sound like other, more respected groups but may not be as well operated. Also avoid spam e-mail charity appeals that follow major disasters. They may be scams.