Alternative minimum tax (AMT) is an “alternative” tax for people who are considered having higher income and was passed by congress in 1969 as a check to make sure taxpayers were not slipping out of their fair share of taxes. AMT recalculates taxable income by excluding some deductions and credits allowed for the traditional modified adjusted gross income calculation (e.g. property taxes and certain business deductions). There is an AMT exemption that is applied after preferential deductions are added back to income. If the adjusted income is less than the AMT exemption then the taxpayer would not pay AMT, but if the AMT adjusted income is over the exemption the taxpayer would calculate a tentative minimum tax. If the tentative minimum tax exceeds the regular tax then the taxpayer would pay the excess plus the regular tax amount.
AMT is calculated and reported on Form 6251.
Below are the AMT exemptions for 2019, which are generally adjusted for inflation each year.
| Single taxpayers: | $71,700 |
| Married taxpayers filing jointly: | $111,700 |
| Married filing separately: | $55,850 |
| Head of Household: | $71,700 |
This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.
