Common Items Subject to the Alternative Minimum Tax (AMT):

  • Tax-exempt interest from Private Activity Bonds
  • Gain on Small Business Stock qualifying for exclusion
  • Intangible Drilling Costs
  • Passive Income or Loss
  • Investment Expenses
  • Depletion
  • Personal Exemptions
  • Standard deduction
  • Mining Exploration & Development Costs
  • Income from exercising incentive stock options
  • Accelerated Depreciation in excess of straight line
  • Itemized deductions for taxes, miscellaneous and medical expenses

Calculation of the AMT:

Regular Taxable Income
(+) Positive AMT Adjustments
(-) Negative AMT Adjustments
(=) Taxable Income after AMT Adjustments
(+) Tax Preferences
(=) Alternative Minimum Taxable Income (AMTI)

AMTI
(-) AMT Exemption
(=) Minimum Tax Base
(x) AMT Rate
(=) Tentative AMT
(-) Regular income tax on taxable income
(=) AMT

AMT Tax Rates
26% Rate - applies to AMT taxable income of $182,500 or less (after the AMT exemption), $91,250 or less if married filing separately.
28% Rate - applies to AMTI exceeding the $182,500 or $91,250 threshold.

AMT Exemption Amounts
 

Filing Status Exemption Amount 2014 Phaseout*
Married/Surviving Spouse $82,100 $156,500+
Single $52,800 $117,300+
Married, filing separately $41,050 $  78,250+

*The exemptions are phased out by 25% of the excess of AMTI over the listed amount.
 

Preferences and Adjustments

Related Articles
  1. Taxes

    End-of-the-Year Checklist to Save on Income Taxes

    From grouping related expenses to factoring in the alternative minimum tax, here are some things you need to keep in mind when doing tax planning.
  2. Taxes

    Tax Planning Strategies for the Year Ahead

    The uncertainty surrounding President-Elect Trump may have a significant impact on tax planning.
  3. Taxes

    10 Tax Tips For Stock Options

    Options and restricted stock are a great perk--if you don't get caught in a tax trap. Here's what you need to know.
  4. Taxes

    Are You Missing Out On These Tax Exemptions?

    To lower your tax bill, make sure that you're taking all the exemptions that apply to you.
  5. Taxes

    Valuable Year-End Tax Moves for 2016 (Part Three)

    Here's a look at tax strategies for itemized deductions, charitable gifts and other tax credits.
  6. Taxes

    10 Money-Saving Year-End Tax Tips

    Getting organized well before the deadline will curb your frustration and your tax liability.
  7. Taxes

    Reporting Your Interest Income

    Find out how your accounts are taxed and which forms you need.
  8. Investing

    How to Diversify with Muni Bond ETFs

    Thinking of diversifying with bonds? Consider these muni bond ETFs.
  9. Taxes

    5 Groups That Don't Pay Taxes

    Now that you've paid your share, find out who didn't have to pay taxes this year.
  10. Investing

    American Tower Stock Trades Ex-Dividend Monday

    American Tower will send its dividend payment on April 28 to shareholders of record as of April 12.
Frequently Asked Questions
  1. When are Beneficiaries of a Will Notified?

    Learn when the beneficiaries of a will must be notified, and understand how this requirement varies depending on whether ...
  2. Why Does Larry Page Pay Himself a $1 Salary?

    Google co-founder Larry Page continues to take an annual salary of only $1 as chief executive officer.
  3. What is Common Stock and Preferred Stock?

    Learn about the differences between common and preferred shares. Explore situations where preferred shares have more favorable ...
  4. Can CareCredit be Used for Family Members?

    Learn more about the available options that CareCredit offers to pay for out-of-pocket medical procedures with little to ...
Trading Center