What is the Alternative Minimum Tax (AMT) in 2019? - Community

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What is the Alternative Minimum Tax (AMT) in 2019?

As the name says, it's an "alternative" tax which we calculate behind-the-scenes, along with your regular federal tax. If the alternate method results in a higher tax than the regular method, you pay the difference on top of your regular tax.

Good news: The number of taxpayers subject to the AMT is expected to drop dramatically in tax years 2018 through 2025, due to higher exemptions and phase-out thresholds.

2019 2018
AMT exemptions:
  • $111,700 (Married Filing Jointly)
  • $55,850 (Married Filing Separately)
  • $71,700 (all others)

Exemption phase-out thresholds:

  • $1,020,600 (Married Filing Jointly)
  • $510,300 (all others)
AMT exemptions:
  • $109,400 (Married Filing Jointly)
  • $54,700 (Married Filing Separately)
  • $70,300 (all others)

Exemption phase-out thresholds:

  • $1,000,000 (Married Filing Jointly)
  • $500,000 (all others)

How is AMT calculated?

The AMT calculation is complicated, but here's an outline of how it works:

  1. We start by figuring your AMT income (your AMTI) by adding certain deductions back into to your AGI.
  2. We subtract your AMT exemption from your AMTI.
  3. The result is then multiplied by the AMT tax rate to come up with your alternative tax.
    • If your alternative tax is less than your regular tax, you're exempt from paying it (most taxpayers fall into this group).
    • If your alternative tax is more than your regular tax, you have to pay the difference. We account for this in your final tax refund or taxes owed amount—you don't pay it separately.

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