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Alternative Minimum Tax (AMT)

Alternative Minimum Tax (AMT)

For tax years beginning after December 31, 2017 and before January 1, 2026, are as follows:

Married Filing Jointly) MFJ) and surviving spouse           $109,400

Single                                                                                              $70,300

Married Filing Separately                                                          $54,700


With higher phase-out of the AMT exemption and fewer itemized deductions figuring into the calculation, the number of filers facing AMT should be significantly reduced.


Background: The alternative minimum tax (AMT) is a tax system separate from the regular tax that is intended to prevent a taxpayer with substantial income from avoiding tax liability by using various exclusions, deductions, and credits. Under it, AMT rates are applied to AMT income determined after the taxpayer “gives back” an assortment of tax benefits. If the tax determined under these calculations exceeds the regular tax, the larger amount is owed.


Per IRS, the following items may subject to AMT:


1- Accelerated Depreciation Expense;

2- Stock by exercising an incentive stock option and you did not dispose of the stock in the same year;

3- Tax exempt interest from private activity bonds;

4- Intangible drilling, research, circulation, experimental or mining costs;

5- Amortization of pollution-control facilities or depletion;

6- Profit or loss from tax-shelter farm activities or passive activities;

7- Income from long-term contracts not figured using the percentage-of-completion method;

8- Interest paid on a home mortgage NOT used to buy, build or substantially improve your home;

9- Investment interest expense reported on IRS Form 4952;

10- Net Operating Loss (NOL) deduction

11- AMT adjustments from a trust or estate, electing large partnership or cooperative;

12- Section 1202 exclusion;

13- Any general business credit in Part I on Form 3800;

14- Empowerment zone and renewal community employment credit;

15- Qualified electric vehicle credit;

16- Alternative fuel vehicle refueling property credit;

17- Credit for prior year minimum tax; and,

18- Loss from Form 4684 on Schedule A, line 28 and also reporting your standard deduction on line 28 of Schedule A.


Zaher Fallahi, Tax Attorney, CPA, is a Tax Controversy Attorney, and defends taxpayers in resolving their Income Tax and Offshore Accounts (FBAR and FATCA) problems. Telephones: (310) 719-1040 (Los Angeles), (714) 546-4272 (Orange County),  Toll Free 877-687-7558, e-mail taxattorney@zfcpa.com