 TITLE: What Is Alternative Minimum Tax? CONTENT: How Is the AMT Calculated?\n--------------------------\nThe exact AMT calculations are detailed on IRS Form 6251, and they're very complicated. You can use tax software or hire a professional tax preparer to do the work for you, but you may still want to understand how the calculations work.\nThe IRS offers a simplified overview of what goes into the AMT calculations:\n1.  Determine alternative minimum taxable income (AMTI) using the AMT system to add up all your taxable income and make adjustments based on the allowed AMT adjustments and deductions.\n2.  Subtract your AMT exemption from your AMTI.\n3.  Multiply the result by your AMT tax rate.\n4.  If applicable, subtract your AMT foreign tax credit.\nYour AMT exemption lowers your taxable income within the AMT system, and helps keep low- to medium-income households from being affected by AMT.\nFor the 2018 tax year, the AMT exemptions are:\n*   Single and head of household: $70,300\n*   Married filing jointly: $109,400\n*   Married filing separately: $54,700\nAs an example, a single filer with an AMTI of $200,000 would subtract the $70,300 exemption for a taxable income under the AMT system of $129,700.\nSome high-income taxpayers don't get to claim the full exemption. The exemption amount begins to decrease (eventually down to zero) for single taxpayers with an AMTI of $500,000 or more and married filing jointly taxpayers with an AMTI of $1 million or more.\nAfter subtracting your AMT exemption, the resulting taxable income is subject to the AMT tax rates.\nThere are two AMT tax brackets: 26 percent for the first $191,100 of taxable AMT income and 28 percent for anything above that. Using the example above, the $129,700 taxable income gets multiplied by .26 (the 26 percent tax rate) to wind up with a tax of $33,722. This is called the tentative minimum tax.\nIf you qualify for the foreign income tax credit, you may have to subtract the AMT foreign tax credit (see page 10 of the instructions for Form 6251 for more details) to find your final tentative minimum tax—the amount you owe based on the AMT system.\nNext, compare your final tentative minimum tax with how much you owe based on the regular tax system. You pay the greater of the two as your income tax for the year. (Note that technically, only the difference between your regular income tax amount and tentative minimum tax amount is considered your alternative minimum tax.) END