amt alternative minimum tax Calculator

Formula

To calculate the alternative minimum tax (AMT):

\[ \text{AMT} = A \times (B - C) - D \]

Where:

$\text{AMT}$ is the alternative minimum tax
$A$ is a flat rate of 15%
$B$ is the adjustable tax income ($)
$C$ is $40,000
$D$ is non-refundable tax credits ($)

What is AMT?

AMT, short for alternative minimum tax, is a method of calculating the minimum amount a person owes in taxes based on their income. It ensures that individuals with high incomes pay at least a minimum amount of tax.

Example Calculation 1

Let's assume the following values:

Adjustable Tax Income ($B$) = $100,000
Non-Refundable Tax Credits ($D$) = $5,000

Using the formula:

\[ \text{AMT} = 0.15 \times (100,000 - 40,000) - 5,000 = 0.15 \times 60,000 - 5,000 = 9,000 - 5,000 = 4,000 \]

The Alternative Minimum Tax is $4,000.

Example Calculation 2

Let's assume the following values:

Adjustable Tax Income ($B$) = $150,000
Non-Refundable Tax Credits ($D$) = $10,000

Using the formula:

\[ \text{AMT} = 0.15 \times (150,000 - 40,000) - 10,000 = 0.15 \times 110,000 - 10,000 = 16,500 - 10,000 = 6,500 \]

The Alternative Minimum Tax is $6,500.