What You Should Know about the AMT
Even if you’ve never paid Alternative Minimum Tax (AMT) before, you should not ignore this tax. Why? Because your tax situation might have changed, and this might be the year that you need to pay AMT. AMT attempts to ensure that taxpayers who claim certain tax benefits pay a minimum amount of tax.
Here’s what you should know about the AMT:
- When AMT applies. Your filing status and income determine the amount of your AMT exemption. You may have to pay the AMT, if your taxable income plus certain adjustments is more than your AMT exemption amount. In most cases, if your income is below this amount, you will not owe AMT.
- Exemption amounts. The 2016 AMT exemption amounts are:
- $53,900 if you are Single or Head of Household.
- $83,800 if you are Married Filing Jointly or Qualifying Widow(er).
- $41,900 if you are Married Filing Separately.
Your AMT exemption may be reduced or eliminated, if you are a high-income taxpayer.
- Use the right forms. If you owe AMT, you usually must file Form 6251, Alternative Minimum Tax-Individuals. Some taxpayers who owe AMT can file Form 1040A and use the AMT Worksheet in the instructions.
- AMT rules are complex. The easiest way to prepare and file your tax return is to use a qualified tax preparer who will figure out AMT for you, if you owe the tax. Call us today for more information or to set up a consultation.