1. What is AMT?

The Alternative Minimum Tax (AMT) is a parallel tax system designed to ensure that high-income taxpayers pay at least a minimum amount of tax, regardless of deductions, credits, or exemptions.

2. How Does the Calculator Work?

The calculator uses the AMT equation:

Where:

• \( AMTI \) — Alternative Minimum Taxable Income (USD)
• \( \text{2025 Exemption} \) — AMT exemption amount for 2025 (USD)
• \( \text{Rate} \) — AMT rate (decimal)

Explanation: The equation calculates the tentative minimum tax by applying the AMT rate to income above the exemption amount.

3. Importance of AMT Calculation

Details: Calculating AMT helps taxpayers determine whether they owe alternative minimum tax and plan their tax strategies accordingly.

4. Using the Calculator

Tips: Enter your Alternative Minimum Taxable Income, the 2025 exemption amount (default is $73,200 for single filers), and the AMT rate (default is 0.26 for the first bracket).

5. Frequently Asked Questions (FAQ)

Q1: Who needs to pay AMT?
A: Taxpayers with high income and large deductions may trigger AMT. The calculator helps estimate potential liability.

Q2: What's the 2025 exemption amount?
A: The default value is $73,200 for single filers (subject to change based on final IRS adjustments).

Q3: What are the AMT rates?
A: The AMT has two rates: 26% on AMTI up to $206,100 and 28% on amounts above (for single filers).

Q4: How is AMTI different from regular taxable income?
A: AMTI adds back certain deductions and preferences that are allowed for regular tax purposes.

Q5: Can I avoid AMT?
A: Tax planning strategies like timing deductions or income can help minimize AMT exposure.