Alternative Minimum Tax
The most frequently asked tax questions related to Alternative Minimum Tax
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a. The exemption amounts that were scheduled to be $86,200 for joint filers (one-half of that amount for separate filers) and $55,400 for unmarried taxpayers, for 2018, have been increased to $109,400 for joint filers ($54,700 for separate filers) and $70,300 for all others.
b. The AMTI threshold, above which the exemption is phased out $1 for every $4 of excess, has been increased to $1,000,000 for married taxpayers filing jointly and $500,000 for all others. These amounts were scheduled to be $164,100 for joint filers, $82,050 for separate filers and $123,100 for all other taxpayers.
This failure, with the resulting need for the annual Patch, has been going on since 2000.
Congress permanently addressed the AMT issue by indexing the annual exemption limits for inflation retroactive for 2012.
To make sure that all taxpayers with substantial income are not able to avoid paying tax, the law limits the benefit a taxpayer can receive from favorable treatment of certain deductions and preferences.
The Alternative Minimum tax is computed on IRS Form 6251.
If the Alternative Minimum tax calculation results in a higher tax then the Regular income tax, then the difference is added to the Regular tax computation.
$80,800 for joint filers and qualifying widow(er) taxpayers ($78,750 in 2012)
$40,400 for married filing separately taxpayers ($39,375 in 2012)
There is an exemption phase-out for taxpayers with Alternative Minimum Taxable Income more than $115,400 for Single or Head of Household
$153,900 for MFJ or Widower
$76,950 for MFS.
For Married filing jointly or Qualifying widow(er) the phase-out is $153,900 and is zeroed out at $477,100.
For Married filing separately the phase-out is $76,950 and is zeroed out at $238,550.