Monday, March 21, 2016

Five Things You Should Know about the AMT

You may not know about the Alternative Minimum Tax because you’ve never had to pay it before. However, your income may have changed and you may have to pay it this year. The AMT is an income tax imposed at nearly a flat rate on an adjusted amount of taxable income above a certain threshold. If you have a higher income, you may be subject to the AMT.
Here are five things you should know about the AMT:
1. Know when the AMT applies. You may have to pay the AMT if your taxable income, plus certain adjustments, is more than your AMT exemption amount. Your filing status and income define the amount of your exemption. In most cases, if your income is below this amount, you will not owe the AMT.
2. Know exemption amounts. The 2015 AMT exemption amounts are:
• $53,600 if you are Single or Head of Household.
• $83,400 if you are Married Filing Jointly or Qualifying Widow(er).
• $41,700 if you are Married Filing Separately.
You will reduce your AMT exemption if your income is more than a certain amount.
3. Use IRS e-file. Keep in mind that the AMT rules are complex. The easiest way to prepare and file your tax return is to use IRS e-file. The tax software will figure the AMT for you, if you owe the tax.
4. Try the tool. Use the AMT Assistant tool on IRS.gov to find out if you need to pay the tax.
5. Use the right forms. Usually, if you owe the AMT, you must file Form 6251, Alternative Minimum Tax – Individuals. Some taxpayers who owe the AMT can file Form 1040A and use the AMT Worksheet in the instructions.

Learn more about the AMT on IRS.gov. You can also see the Form 6251 instructions. If you e-file your tax return you don't need any paper forms to mail to the IRS. If you do need a paper form, you can visit IRS.gov/Forms to view, download and print what you need right away.

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