true
  • reminder icon
    Still need to file? Our experts can get your taxes done right. Get started arrow right icon Still need to file?
    Our experts can get your taxes done right. Get started arrow right icon
  1. TurboTax /
  2. Tax Calculators & Tips /
  3. Tax Tips Guides & Videos /
  4. IRS Tax Return /
  5. Video: The Alternative Minimum Tax (AMT) Explained

Video: The Alternative Minimum Tax (AMT) Explained

Updated for Tax Year 2017 • December 9, 2022 01:01 PM


OVERVIEW

Originally created to make sure the wealthy paid taxes even after using tax breaks and loopholes, the Alternative Minimum Tax (AMT) has never been updated and continues to impact middle class Americans more and more each year as a result of inflation. To compensate for inflation, the AMT now includes an exemption amount. This exemption is indexed for inflation so it changes every year.


TABLE OF CONTENTS

Taxes done right, with experts by your side

Get unlimited advice, an expert final review and your maximum refund, guaranteed with Live Assisted Basic.

For simple tax returns only.
See if you qualify.

 

Video transcript:

Hello, I’m Nick from TurboTax with some helpful information about the alternative minimum tax, or AMT.

The Alternative Minimum Tax, or AMT, was introduced in 1969 to ensure that the wealthiest Americans paid taxes, even after using tax breaks and loopholes, but the AMT was never updated to account for inflation. Every year, more of the middle class was caught up in it.

To compensate for inflation, the AMT now includes an exemption amount. This exemption is indexed for inflation so it changes every year.

For the 2017 tax year, the exemption amount is:

  • $70,300 for single taxpayers;
  • $109,400 for married taxpayers filing jointly;
  • $54,700 for married individuals filing separately; and
  • $70,300 if you’re filing your taxes as a head of household.

If your taxable income isn’t above these levels, you shouldn’t have to pay the AMT.

However, to calculate whether the AMT applies to you, you need to use Form 6251. It begins by using your Adjusted Gross Income After Itemized Deductions from your 1040 form. Many of the itemized deductions that you were able to take under the standard tax calculations are then added back into your income for the AMT.

If the tax calculated on Form 6251 is higher than what is calculated on your regular tax return, you will have to pay the difference as AMT, in addition to your regular tax amount.

For more tips and information to help you get your taxes done smarter, visit TurboTax.com.

Man using a handheld calculator

Let an expert do your taxes for you, start to finish with TurboTax Live Full Service. Or you can get your taxes done right, with experts by your side with TurboTax Live Assisted. File your own taxes with confidence using TurboTax. Just answer simple questions, and we’ll guide you through filing your taxes with confidence. Whichever way you choose, get your maximum refund guaranteed.

Taxes done right, with experts by your side

Get unlimited advice, an expert final review and your maximum refund, guaranteed with Live Assisted Basic.

For simple tax returns only.
See if you qualify.

Get your max refund

Answer simple questions about your life and TurboTax Free Edition will take care of the rest.

For simple tax returns only
See if you qualify

Looking for more information?