Alternative Minimum Tax (AMT) Calculator
Estimate whether you owe Alternative Minimum Tax and how much, by comparing your regular tax to your tentative minimum tax under the AMT rules.
AMT Calculator
Include state & local taxes, miscellaneous itemized deductions, ISO exercise spread, private‑activity bond interest, etc.
Use your total regular tax from Form 1040 (including tax on qualified dividends/capital gains).
Enter any credits that reduce AMT (e.g., foreign tax credit, prior‑year minimum tax credit).
Results
AMT status
Awaiting input…
Alternative Minimum Tax (AMT) due
$0
Additional tax you may owe on top of your regular tax.
Total tax if AMT applies
$0
Equals tentative minimum tax minus AMT‑allowed credits.
Show detailed AMT breakdown
This tool is an educational estimator using simplified AMT rules and approximate brackets. It does not replace IRS Form 6251 or professional tax advice.
How this AMT calculator works
The Alternative Minimum Tax (AMT) is a parallel tax system. You compute your tax twice:
- Your regular tax under the normal rules.
- Your tentative minimum tax under AMT rules.
If your tentative minimum tax is higher than your regular tax (after AMT‑allowed credits), the difference is your AMT liability.
Step 1 – Compute Alternative Minimum Taxable Income (AMTI)
We start from your regular taxable income and add back items that are treated differently under AMT:
AMTI = Regular taxable income
+ AMT adjustments and preference items
Common adjustments and preference items include:
- State and local income or property taxes (SALT)
- Miscellaneous itemized deductions disallowed for AMT
- Incentive stock option (ISO) exercise spread
- Interest from certain private‑activity municipal bonds
- Differences in depreciation and passive activity losses
Step 2 – Subtract the AMT exemption
AMT provides an exemption that shields a portion of your AMTI from tax. The exemption depends on your filing status and phases out at higher income levels.
In simplified form:
AMT base = max( 0, AMTI − AMT exemption )
Our calculator uses approximate exemption amounts and phase‑out thresholds for the selected tax year and filing status.
Step 3 – Apply AMT rates (26% and 28%)
AMT uses just two main rates:
- 26% on AMT base up to a threshold
- 28% on AMT base above that threshold
Tentative minimum tax = 26% × min(AMT base, threshold)
+ 28% × max(0, AMT base − threshold)
Step 4 – Compare to regular tax
Finally, we compare your tentative minimum tax to your regular tax, after subtracting any AMT‑allowed credits:
Adjusted regular tax = Regular tax − AMT‑allowed credits
AMT due = max( 0, Tentative minimum tax − Adjusted regular tax
)
If AMT due is zero, your regular tax already exceeds your tentative minimum tax and you do not owe AMT.
Interpreting your AMT results
If AMT due is zero
This means your regular tax is higher than or equal to your tentative minimum tax. You are not subject to AMT for the year under this simplified model.
If AMT due is positive
The calculator estimates that you may owe additional AMT. The “Total tax if AMT applies” figure shows your combined regular tax plus AMT.
Because AMT rules are complex, consider:
- Reviewing IRS Form 6251 and its instructions.
- Using professional tax software or consulting a tax professional.
Tips to reduce or avoid AMT (planning ideas)
While you cannot “opt out” of AMT, certain planning moves may reduce your exposure:
- Manage timing of state and local tax payments so large SALT payments do not bunch into a single AMT‑heavy year.
- Plan ISO exercises (incentive stock options) carefully, since the spread is an AMT preference item.
- Avoid or limit private‑activity municipal bonds if you are frequently in AMT.
- Coordinate deductions and income across years to smooth AMTI where possible.
These strategies are highly individual; always discuss them with a qualified tax advisor.
Limitations and assumptions
- This calculator uses approximate AMT exemptions, phase‑outs, and thresholds for recent tax years.
- It assumes ordinary income only for AMT rate purposes and does not separately model preferential capital‑gains rates under AMT.
- It does not handle every special rule (e.g., certain credits, foreign income, complex business adjustments).
Use this tool for education and rough planning, not for filing your return. For exact calculations, rely on IRS forms and professional guidance.
Frequently asked questions about AMT
What is the Alternative Minimum Tax (AMT)?
The Alternative Minimum Tax is a parallel U.S. federal income tax system designed to ensure that higher‑income taxpayers who benefit from many deductions and credits still pay at least a minimum amount of tax. You compute your tax twice—once under the regular rules and once under AMT—and pay whichever is higher.
Who is most likely to pay AMT?
You are more likely to trigger AMT if you have high income, large state and local tax deductions, significant miscellaneous itemized deductions, large incentive stock option exercises, high interest and investment income, or substantial private‑activity bond interest. However, the AMT exemption is relatively high, so many taxpayers never owe AMT.
What are common AMT adjustments and preference items?
Common AMT adjustments include state and local income or property taxes, miscellaneous itemized deductions, the spread on incentive stock options (ISOs) when exercised, interest from private‑activity municipal bonds, certain depreciation differences, and some passive activity losses. These items are added back to regular taxable income to compute AMTI.
Does claiming the standard deduction affect AMT?
Yes. The regular standard deduction is not allowed for AMT. If you claim the standard deduction on your regular return, it is effectively added back when computing AMTI. To approximate this in the calculator, you can include your standard deduction amount in the “AMT adjustments & preference items” field.
Is this AMT calculator an official IRS tool?
No. This is an independent educational tool that uses simplified assumptions and approximate AMT parameters. It does not replace IRS Form 6251, tax software, or professional advice. For filing your return, always rely on official IRS instructions or a qualified tax professional.