AMT Calculator
Calculate your Alternative Minimum Tax (AMT) liability
Note: AMT exemptions phase out at higher income levels
Note: This calculator uses simplified, illustrative AMT rules. Actual AMT calculations are complex and depend on many factors including preference items, adjustments, and current tax law. Consult a tax professional for accurate AMT calculations.
How to Use This Calculator
Enter your Adjusted Gross Income
Input your AGI from your tax return, which serves as the starting point for AMT calculations.
Select your filing status
Choose your filing status as AMT exemption amounts and brackets vary by status.
Enter AMT exemptions
Input the number of AMT exemptions (note that these phase out at higher income levels).
Calculate your AMT
Click calculate to see your estimated Alternative Minimum Tax liability.
Formula
AMT = (AMTI × Rate) where AMTI = AGI - AMT Exemption
Example (Simplified):
AGI = $200,000, Filing Status = Single, Exemptions = 0
AMT Exemption = $81,300 (illustrative)
AMTI = $200,000 - $81,300 = $118,700
AMT = $118,700 × 26% = $30,862 (first bracket rate)
About AMT Calculator
The Alternative Minimum Tax (AMT) Calculator helps taxpayers understand and estimate their potential AMT liability. The AMT is a parallel tax system designed to ensure that high-income taxpayers pay a minimum amount of tax, even if they have many deductions, exemptions, or tax preferences that would otherwise reduce their regular tax liability to very low levels. The AMT was originally created in 1969 to prevent wealthy taxpayers from using loopholes to avoid paying taxes, but over time it has affected a broader range of taxpayers. The AMT calculation starts with your regular taxable income (or AGI) and then adds back certain "preference items" and makes specific adjustments that are not allowed under the AMT system. Common adjustments include state and local tax deductions, certain medical expenses, miscellaneous itemized deductions, and various tax preference items like incentive stock options, private activity bond interest, and accelerated depreciation. After making these adjustments, you subtract the AMT exemption amount (which varies by filing status and phases out at higher income levels) to arrive at your Alternative Minimum Taxable Income (AMTI). The AMT is then calculated using a flat rate structure with two brackets: 26% on the first portion and 28% on amounts above the threshold. You pay whichever is higher: your regular tax or your AMT. Understanding your AMT exposure is crucial for tax planning, especially for high-income earners, those with significant deductions, or taxpayers with certain types of income or investments that trigger AMT adjustments.
When to Use This Calculator
- Tax planning: Estimate AMT exposure before year-end
- High-income earners: Understand AMT impact on tax liability
- Investment planning: Evaluate AMT implications of certain investments
- Year-end planning: Make decisions to minimize AMT impact
Why Use Our Calculator?
- ✅ Complex system: Understand the AMT without manual calculations
- ✅ Tax planning: Identify potential AMT exposure early
- ✅ Educational: Learn how AMT works and affects taxpayers
- ✅ Free tool: No registration or payment required
Frequently Asked Questions
What is the Alternative Minimum Tax?
The AMT is a parallel tax system that ensures high-income taxpayers pay a minimum amount of tax, even with many deductions. You pay whichever is higher: regular tax or AMT.
Who is subject to AMT?
High-income taxpayers, those with significant deductions, taxpayers with certain types of income (like incentive stock options), and those with large state and local tax deductions are most likely to be subject to AMT.
What are AMT preference items?
Preference items are deductions or exclusions that are added back to income for AMT purposes, such as state and local tax deductions, certain medical expenses, incentive stock options, and private activity bond interest.
How can I avoid AMT?
Strategies include timing income and deductions, managing incentive stock options carefully, and working with a tax professional to plan around AMT thresholds. However, AMT is complex and professional guidance is recommended.
Is this calculator accurate for all situations?
This calculator provides a simplified estimate. Actual AMT calculations are extremely complex and depend on many factors including preference items, adjustments, exemptions, and current tax law. Always consult a tax professional for accurate AMT calculations.