William Byrnes' Tax, Wealth, and Risk Intelligence

The IRS’ Tax Tip 2014-10

The IRS published a recent tax tip for the 2014 tax filing season to remind taxpayers about the possibility that even if no tax is owed under regular tax rules, under the special calculation rules of the alternative minimum tax system, tax may be owed anyway.  Excerpted below:

The AMT attempts to ensure that some individuals who claim certain tax benefits pay a minimum amount of tax.

1. You may have to pay the tax if your taxable income, plus certain adjustments, is more than the AMT exemption amount for your filing status. If your income is below this amount, you usually will not owe AMT.

2. The 2013 AMT exemption amounts for each filing status are:

• Single and Head of Household = $51,900

• Married Filing Joint and Qualifying Widow(er) = $80,800

• Married Filing Separate = $40,400

3. The rules for AMT are more complex than the rules for regular income tax. The best way to make it easy on yourself is to use IRS e-file to prepare and file your tax return. E-file tax software will figure AMT for you if you owe it.

4. If you file a paper return, use the AMT Assistant tool on IRS.gov to find out if you may need to pay the tax.

5. If you owe AMT, you usually must file Form 6251, Alternative Minimum Tax – Individuals. Some taxpayers who owe AMT can file Form 1040A and use the AMT Worksheet in the instructions.

Additional IRS Resources:

• Tax Topic 556 – Alternative Minimum Tax