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What is the Alternative Minimum Tax?

There are actually TWO distinct Federal tax systems in operating, the regular tax (as calculated on the series 1040 forms and applicable to most people) and the alternative minimum tax (AMT). The latter applies generally to those whose deductions or tax- favored income include "tax preferences" which need to be added back in determining the calculation of the AMT, which is done on Form 6251.

Tax preference additions include your personal exemptions, standard deduction (or itemized deductions related to interest, taxes and the deductible portion of your "miscellaneous" or medical expenses), accelerated depreciation over straight line, tax exempt interest on private activity bonds, and certain deductions related to oil and gas investments. If your taxable income, with these items added back, exceeds $45,000 joint, $33,750 unmarried or $22,500 married/separately, you may be subject to this tax, and should complete Form 6251.



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We do not offer legal advice. All information provided on this website is for informational purposes only and is not a substitute for proper legal advice. If you have legal questions, we recommend that you seek the advice of legal professionals.

Tax Disclaimer: To ensure compliance with IRS Rules, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein.

Copyright 2017 Wink Tax Services / Wink Inc.
Last modified: January 30, 2017