|Tax Topic #556
||2008 Tax Year
Topic 556 - Alternative Minimum Tax
The tax laws provide tax benefits for certain kinds of income and allow
special deductions and credits for certain kinds of expenses. The alternative
minimum tax (AMT) attempts to ensure that anyone who benefits from these tax
advantages pays at least a minimum amount of tax.
The AMT is a separately figured tax that eliminates many deductions and
credits, thus increasing tax liability for an individual who would otherwise
pay less tax. The tentative minimum tax rates on ordinary income are percentages
set by law. For capital gains and certain dividends, the rates in effect for
the regular tax are used.
You may have to pay the AMT if your taxable income for regular tax purposes
plus any adjustments and preference items that apply to you are more than
the AMT exemption amount. The exemption amounts are set by law for each filing
status and are listed in the Form 6251 Instructions.
To find out if you may be subject to the AMT, refer to the Form 1040 Instructions and the Form 1040A Instructions. If you
are filing the Form 1040 you may use the AMT
Assistant for Individuals, which is an electronic version of the AMT worksheet
available on the IRS webpage at www.irs.gov. The AMT worksheet may tell you
that you do not owe the AMT or it may send you to Form 6251, Alternative
Minimum Tax - Individuals. If you are sent to Form 6251, you will have
to complete that form to determine whether you owe the AMT. Form 6251 (PDF), Alternative Minimum Tax - Individuals, is available
in a PDF format on the IRS webpage.
If you are not liable for AMT this year, but you paid AMT in one or more
previous years, you may be eligible to take a special minimum tax credit against
your regular tax this year. If eligible, you should complete and attach Form 8801 (PDF), Credit for Prior Year Minimum Tax -
Individuals, Estates and Trusts.
Page Last Reviewed or Updated: December 22, 2008
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