A certain amount of your income is exempt from the alternative minimum tax. If you're a married couple, the full exemption amount is $80,800, and it's $51,900 for single taxpayers. The "AMT exemption" phases out as incomes rise—that means upper-income individuals and couples making between $200,000 and $500,000 are most likely to face the this tax.
So what are some triggers to watch out for that could put you at risk for the AMT?
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The AMT doesn't allow for many of the deductions that you may qualify for on your regular federal income-tax return—like personal exemptions, standard deductions and deductions for state and local income taxes.
If you live where there are high state and local taxes (often a big deduction on your regular taxes), have a lot of miscellaneous deductions or have a lot of children (which means a lot of personal exemptions), these deductions are adjusted downward or eliminated entirely when calculating the alternative minimum tax.
As a result, they may trigger an AMT liability.
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