Business & Finance Taxes

How to Calculate IRS Alternative Minimum Tax

By Business & Finance Last updated Sunday, April/21/2024

1). Recalculate your taxable income by completing part I of form 6251. When calculating the alternative minimum tax, the IRS disallows or reduces a number of deductions so your taxable income increases.
2). Determine your exemption amount by using line 30. If your taxable income exceeds the amounts listed on form 6251, you must use the exemption worksheet in the form 6251 instructions on page 8 to determine how much of your income is exempt from the alternative minimum tax.
3). Subtract the value of your exemption from step 2 of your recalculated taxable income from step 1 to find the amount of your income subject to the alternative minimum tax.
4). Multiply the result from step 3 by the appropriate alternative minimum tax rate. For the tax year 2009, the rate equals 26 percent for taxable income below $175,000 ($87,500 if married filing separately) and 28 percent for income above those limits. For example, if you were married filing jointly, and your taxable income were $200,000, your alternative minimum tax would be $52,500.

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