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What is the Alternative Minimum Tax (AMT)?

Under the tax law, certain tax benefits can significantly reduce a taxpayer's regular tax amount. The current Alternative Minimum Tax (AMT) was enacted in 1982 and applies to taxpayers with high income by setting a limit on those tax benefits. The AMT is a separate tax that ensures taxpayers who benefit from these special tax deductions and credits pay at least a minimum amount of taxes.

To determine if you’re subject to the AMT, you must first calculate income for AMT purposes. There are certain types of income and deductions that are treated differently for AMT purposes than for regular tax purposes. Credit Karma Tax will automatically calculate some of these differences for you. If there are any additional adjustments that need to be made, you can enter the information on the Alternative Minimum Tax screen.

If your AMT income exceeds certain exemption amounts, you may be subject to AMT. For 2017, the exemption levels are:

  • $54,300 filing single or head of household
  • $84,500 for married filing jointly
  • $42,250 for married filing separately

If your income exceeds these amounts, you could pay a 26 percent tax on the first $187,800 of income ($93,900 if married filing separately). This is your tentative minimum tax.

If your tentative minimum tax is greater than your regular tax, the difference is AMT. You’ll pay the regular tax pull the AMT tax that is calculated. Credit Karma Tax does this calculation for you.

For more information and to find out if you may be subject to the AMT, refer to the Form 1040 Instructions and the Form 1040A Instructions.

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