Form 6251: Alternative Minimum Tax - Individuals

AAA

DEFINITION of 'Form 6251: Alternative Minimum Tax - Individuals'

A tax form distributed by the Internal Revenue Service (IRS) and used to determine the amount of alternative minimum tax (AMT) that a tax payer may owe. Some taxpayers with higher incomes can claim certain deductions that allow them to reduce their regular tax obligation, and the AMT is designed to set an upper limit on how much that deduction can be. Only if there is AMT owed will Form 6251 have to be attached to Form 1040.

INVESTOPEDIA EXPLAINS 'Form 6251: Alternative Minimum Tax - Individuals'

Form 1040 also contains a worksheet that allows a taxpayer to determine whether AMT is owed, but it only provides basic computations. Form 6251 is more detailed and will give a more accurate answer, and simply completing it does not mean that it has to be filed.

RELATED TERMS
  1. Income Tax

    A tax that governments impose on financial income generated by ...
  2. Tax Fairness

    A tax platform based on an ideal that aims to create a system ...
  3. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  4. Alternative Minimum Tax - AMT

    A tax calculation that adds certain tax preference items back ...
  5. 1040 Form

    The standard Internal Revenue Service (IRS) form that individuals ...
  6. Section 7702

    The section of the United States Internal Revenue Code that defines ...
RELATED FAQS
  1. What are some of the arguments in favor of a value-added tax (VAT)?

    A value-added tax (VAT) offers several advantages over an income tax or traditional sales tax. It raises needed government ... Read Full Answer >>
  2. How is compound interest taxed?

    Compound interest is money that is earned and added to a principal balance and then earns additional interest. Adding interest ... Read Full Answer >>
  3. According to the law of supply and demand, what is the effect of an increase or decrease ...

    Standard economic analysis shows that taxes of any form, including income taxes, tend to cause deadweight loss in the market. ... Read Full Answer >>
  4. How does the Fair Accounting Standards Board (FASB) regulate deferred tax liabilities?

    The Financial Accounting Standards Board (FASB) requires that deferred tax liabilities be recognized whenever there is a ... Read Full Answer >>
  5. What cost basis reporting rules are set by the Internal Revenue Service (IRS)?

    In accounting and tax terms, cost basis refers to the price paid for an asset. It's an important calculation for all businesses ... Read Full Answer >>
  6. What are some ways to minimize tax liability?

    Minimizing tax liability is one of the most important financial planning aspects for business owners and individuals each ... Read Full Answer >>
Related Articles
  1. Retirement

    Tax Tips For The Individual Investor

    We give you seven guidelines to help you keep more of your money in your pocket.
  2. Taxes

    How To Appeal Your IRS Audit

    The auditor's review isn't always the last word. Many taxpayers who are audited can successfully appeal their audits and save thousands of dollars.
  3. Taxes

    Surviving The IRS Audit

    Keeping thorough records and knowing the penalties make this experience easier than you'd expect.
  4. Taxes

    How To Cut Your Alternative Minimum Tax

    Save yourself money by lowering the amount of tax you owe.
  5. Taxes

    3 Common Tax Questions Answered

    We clarify some rules that often puzzle taxpayers.
  6. Taxes

    Give Your Taxes Some Credit

    A few tax credits can greatly increase the amount of money you get back on your return.
  7. Retirement

    Some Tax Considerations For Your Retirement Income

    Even if you don’t plan to retire, it’s still a good idea to think ahead about where to live, your income and how it all interacts with Social Security.
  8. Taxes

    How The IRS Catches Tax Cheats & Liars

    When civil and criminal penalties don't deter people from skipping out on their taxes, the IRS has other tools it can use.
  9. Taxes

    What is Withholding Tax?

    Withholding tax is the income tax federal and state governments require employers to withhold from employee paychecks.
  10. Taxes

    OK, So I'll Be Smarter Next Tax Time

    5 tax resolutions to start on right now for a smoother tax return next April 15.

You May Also Like

Hot Definitions
  1. Fixed-Income Arbitrage

    An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income ...
  2. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  3. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  4. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  5. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  6. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
Trading Center