Five Things You Should Know about the AMT Tax

Five Things You Should Know about the AMT

You may not know about the Alternative Minimum Tax because you’ve never had to pay it before. However, your income may have changed and you may have to pay it this year. The AMT is an income tax imposed at nearly a flat rate on an adjusted amount of taxable income above a certain threshold. If you have a higher income, you may be subject to the AMT.

Here are five things you should know about the AMT:

1. Know when the AMT applies. You may have to pay the AMT if your taxable income, plus certain adjustments, is more than your AMT exemption amount. Your filing status and income define the amount of your exemption. In most cases, if your income is below this amount, you will not owe the AMT.

2. Know exemption amounts. The 2015 AMT exemption amounts are:

• $53,600 if you are Single or Head of Household.

• $83,400 if you are Married Filing Jointly or Qualifying Widow(er).

• $41,700 if you are Married Filing Separately.

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

3. Keep in mind that the AMT rules are complex and would be called double jeopardy in criminal court.  AMT is a second set of rules to tax you.  If you are good at tax planning then the IRS gets another crack at you with a second set of rules.  There is no easy way out of AMT tax.

4. Try the tool for yourself. Use the AMT Assistant tool on IRS.gov to find out if you need to pay the tax.

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

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

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