Alternative Minimum Tax (AMT) is a parallel tax system designed to ensure high-income taxpayers pay a minimum. Calculate regular tax and AMT; pay the higher. AMT disallows or limits common deductions (SALT, miscellaneous deductions, certain depreciation) and applies a flat 26% / 28% rate above exemption ($88,100 single / $137,000 married 2026, phasing out above $626,350 / $1,252,700). The 2017 tax reform vastly reduced AMT exposure by raising exemptions — most middle/upper-middle income filers no longer trigger AMT. Still relevant for ISO exercises (bargain element creates AMT income), high-SALT residents, and certain investment income patterns.
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Alternative Minimum Tax
August 22, 2026 · Aditya Gupta
Tax
Related terms
American Opportunity Credit
The American Opportunity Credit provides up to $2,500 per student per year for the first four years of…
Bunching Deductions
Bunching deductions is the strategy of concentrating itemizable expenses into alternating years to exceed the standard deduction in…
Charitable Contribution Deduction
Charitable contribution deductions allow taxpayers who itemize to deduct cash donations to qualified 501(c)(3) charities up to 60%…
Child Tax Credit
The Child Tax Credit (CTC) provides $2,000 per qualifying child under 17, with $1,600 refundable as the Additional…
Deductible Business Expense
A deductible business expense must be both 'ordinary' (common in your industry) and 'necessary' (helpful to the business).…
Dependent
A dependent is a qualifying child or qualifying relative you can claim on your tax return, unlocking the…
