Things you can always do

The following will help to some extent, although they are unlikely to eliminate your AMT entirely.

First, time your state tax payment. For example, if you are unlikely to be in AMT in 2007 but likely to be in AMT in 2008, then move as much as possible state tax payment to 2007. Pay your Q4 estimated tax on 2007/12/31 instead of 2008/1/15. Yes you lose 15 days of interest but that's likely to be much less than the AMT you'll pay. You know you reached the perfect balance when your "regular" tax is the same as your tentative minimum tax.

The same trick can be played with your property tax too. The difference is that timing the state tax payment affects your federal AMT only, while timing the property tax payment may affect both your federal AMT and your state AMT, for states that also charges an AMT (e.g., California)

Next, if you have to be in AMT in a given year, and if your income anyway reached the highest bracket, you can consider moving some of your income to this year. For example, you can choose to exercise some of your NQ stock options this year, or choose to realize some short term capital gains. That way, you pay 28% (the highest AMT rate) on these additional income, instead of 35% (the highest regular tax rate). This is making use of the bad situation this year to make other years better.