Alternative Minimum Tax (AMT) Calculator
Calculate AMT liability and identify tax preference items that trigger alternative minimum tax.
Income & Filing Status
AMT Adjustment Items
ISO exercises are major AMT trigger. Report difference between fair market value and exercise price.
For AMT, only medical expenses over 10% AGI allowed (difference added back).
Miscellaneous deductions disallowed for AMT (added back to income).
AMT requires slower depreciation (150% declining balance vs accelerated).
AMT Tax Preference Items
Private activity bond interest is AMT preference (75% added back).
AMT Calculation
Regular Taxable Income$$150000.00
AMT Adjustments Added Back:
ISO Gain$$50000.00
Medical Adjustment$$0.00
Misc Deductions$$0.00
Depreciation$$0.00
Private Activity Bond$$0.00
Total Adjustments$$50000.00
AMT Income (AMTI)$$200000.00
AMT Exemption (single)$$81700
Reduced Exemption (after phase-out)$$81700.00
AMT Tax Base$$118300.00
Tax Comparison
Regular Tax (estimated)$$33000.00
AMT Tax$$30758.00
26% on first $$220700, 28% above
Total Tax Liability$$33000.00
No AMT - Regular Tax Higher
Regular tax $$33000.00 exceeds AMT $$30758.00. No AMT due. Total tax: $$33000.00. However, AMT adjustments may still need reporting on Form 6251.
AMT Trigger Analysis
You have 1 potential AMT trigger(s):
- ISO exercise: Major trigger. Consider selling shares same year to avoid AMT.
AMT Rates & Exemption (2026)
26% Rate
Up to $$220700
Lower AMTI bracket
28% Rate
Above $$220700
Higher AMTI bracket
Exemption Phase-Out
25% over threshold
Exemption reduced
AMT Avoidance Strategies
ISO timing: Sell ISO shares same year (disqualifying disposition) to avoid AMT, or wait until AMT credit can offset regular tax. Private activity bonds: Consider regular tax-exempt bonds instead. Itemized deductions: Standard deduction avoids AMT adjustments. Depreciation: Elect slower depreciation for AMT-safe. Income timing: Spread ISO exercises across years. AMT credit: Carry forward to offset future regular tax.
Form 6251 Requirements
Must file Form 6251 if: AMT adjustments present, ISO exercised, tax preference items, or income exceeds exemption threshold. Even if no AMT due, Form 6251 may be required to report adjustments. AMT credit calculated on Form 8801 for carryforward.
Key Points
AMT ensures high-income taxpayers pay minimum tax. Two parallel tax systems: regular and AMT. Pay whichever is higher. AMT exemption phases out at higher incomes. ISO exercises are most common trigger. AMT credit can offset future regular tax. Consult tax advisor for complex AMT situations.