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Matt Kesler
Matt Kesler, Accountant
Category: Tax
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Experience:  BS in Accounting and BS in Finance
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At what level of income does the alternative minimum tax ...

Customer Question

At what level of income does the alternative minimum tax kick in & how much tax shuold be paid on $168,000 adjusted gross income.
Submitted: 7 years ago.
Category: Tax
Expert:  Matt Kesler replied 7 years ago.
The AMT is a bit of a tricky calculation. The IRS has reported more AMT calculation errors than any other single tax issue in the past couple years.

This prompted them to set up a great little tool on their website. It is an On-Line AMT Assistant.

Basically, you'll take your tax information from a completed 1040 and fill out a short survey to decide what, if any, AMT is owed.

You can find the 2006 AMT Calculator here:

http://apps.irs.gov/app/amt2006/

And can plug in some estimated values to get a decent idea of whether AMT will be owed.

If so, it will direct you to form 6251, the AMT form, as seen here:

http://www.irs.gov/pub/irs-pdf/f6251.pdf

You can read more about the AMT in the instructions for the 6251 form here:

http://www.irs.gov/pub/irs-pdf/i6251.pdf

Basically, because so many factors go into the AMT calculation I can't tell you for sure based on just your AGI whether you'd need to pay any AMT. You'll want to first estimate the AMT assistant and then look at the 6251 instructions to figure what if any AMT you owe.

Factors include filing status (married, individual, etc.), itemized deductions (both type and amount), children (if any), and AMT paid in previous years.
Matt Kesler, Accountant
Category: Tax
Satisfied Customers: 2734
Experience: BS in Accounting and BS in Finance
Matt Kesler and other Tax Specialists are ready to help you
Customer: replied 7 years ago.
You have answered only half of the question. I could have gotten that information from irs.gov for free
Expert:  Matt Kesler replied 7 years ago.
Assuming you file as Individual with no Dependents and don't use itemized deductions your income of $168,000 would not qualify you for paying the AMT.

However, if you have a different filing status and especially if you itemize your deductions this may change.
Customer: replied 7 years ago.
I'll accept your answer, but you have not fully answered my question in a meaningful way. Very disappointed.
Expert:  Matt Kesler replied 7 years ago.
Please do not accept until you are satisfied.

How can I assist you further? We seek to have every customer completely satisfied.

If you will let me know what your planned filing status will be, and whether you'll claim any dependents, I can give you a better AMT estimate. Do note that this will again be a rough ball-park estimate.
Customer: replied 7 years ago.
I asked a very straight forward question, I did not receive a straight forward answer
Expert:  Matt Kesler replied 7 years ago.
I apologize for that, the problem is that the AMT calculation is a bit too complex for a simple answer. The level at which the AMT begins to become an issue depends on many variables and I cannot accurately estimate the level at which you'll begin to owe the tax with AGI alone.

You can read more on the topic at these sites:

http://www.smartmoney.com/tax/filing/index.cfm?story=amt

http://www.fairmark.com/amt/amt101.htm

http://www.hrblock.com/taxes/tools/2005commonhelp/amtincome.html

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Matt Kesler
Matt Kesler
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BS in Accounting and BS in Finance