Things You Should Know about the Alternative Minimum Tax

Your Guide to State, Local, Federal, Estate + International Taxation

Even if you’ve never paid the Alternative Minimum Tax before, you should not ignore this tax. Your taxes may have changed so that this may be the year that you need to pay AMT. You may have to pay this tax if your income is above a certain amount. AMT attempts to ensure that taxpayers who claim certain tax benefits pay a minimum amount of tax.

Here are some things that you should know about the AMT:

  1. When AMT applies. You may have to pay the AMT if your taxable income plus certain adjustments is more than your exemption amount. Your filing status and income determine the amount of your exemption. In most cases, if your income is below this amount, you will not owe AMT.
  2. Exemption amounts. The 2014 AMT exemption amounts are:
  • $52,800 if you are Single or Head of Household.
  • $82,100 if you are Married Filing Joint or a Qualifying Widow(er).
  • $41,050 if you are Married Filing Separate.

You will reduce your AMT exemption if your income is more than certain limits.

Use the right forms. If you owe AMT, you usually must file Form 6251, Alternative Minimum Tax – Individuals. Some taxpayers who owe AMT can file Form 1040A and use the AMT Worksheet in the instructions.

If you have any additional questions you can contact our office at 480-839-4900 and one of our tax professionals would be happy to assist. You can also learn more about the AMT on IRS.gov. Also, see the Form 6251 instructions.

By Danette Hefty, EA