Alternative Minimum Tax (AMT) Estimator Formula
Understand the math behind the alternative minimum tax (amt) estimator. Each variable explained with a worked example.
Formulas Used
AMT (if any)
amt_owed = max(tentative_amt - regular_tax, 0)Alternative Minimum Taxable Income
amti_display = amtiRegular Tax
regular_tax_display = regular_taxVariables
| Variable | Description | Default |
|---|---|---|
taxable_income | Taxable Income(USD) | 200000 |
salt_deduction | SALT Deduction Claimed(USD) | 10000 |
other_preferences | Other AMT Preference Items(USD) | 0 |
amti | Derived value= taxable_income + salt_deduction + other_preferences | calculated |
amt_exemption | Derived value= 85700 | calculated |
amt_base | Derived value= max(amti - amt_exemption, 0) | calculated |
tentative_amt | Derived value= amt_base <= 232600 ? amt_base * 0.26 : 60476 + (amt_base - 232600) * 0.28 | calculated |
regular_tax | Derived value= taxable_income <= 100525 ? 5426 + (taxable_income - 47150) * 0.22 : 17168.5 + (taxable_income - 100525) * 0.24 | calculated |
How It Works
Alternative Minimum Tax
The AMT is a parallel tax system that limits certain deductions and tax breaks.
AMT = max(Tentative AMT - Regular Tax, 0)
2024 AMT Exemptions
AMT rates: 26% on first $232,600, 28% above that.
Worked Example
$200,000 income, $10,000 SALT deduction.
- 01AMTI = $200,000 + $10,000 = $210,000
- 02AMT base = $210,000 - $85,700 = $124,300
- 03Tentative AMT = $124,300 x 26% = $32,318
- 04Regular tax on $200k = ~$36,428
- 05AMT = max($32,318 - $36,428, 0) = $0
Frequently Asked Questions
What triggers AMT?
Common triggers: large SALT deductions, incentive stock option exercises, tax-exempt interest from private activity bonds, and large itemized deductions.
Is AMT still common?
The 2017 tax reform significantly reduced AMT exposure by increasing exemptions and capping SALT at $10,000. Far fewer taxpayers owe AMT now.
Can I get AMT credit in future years?
Yes. If you pay AMT due to timing differences (like ISO exercises), you may claim an AMT credit in future years when those items reverse.
Ready to run the numbers?
Open Alternative Minimum Tax (AMT) Estimator