AMT Exemption

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AMT Exemption

The amount of a person or company's income or profit that is not subject to the alternative minimum tax. The AMT exemption gradually decreases as one's income or profit increases.
References in periodicals archive ?
The AMT exemptions were adjusted for inflation for the first time in 2013, and are projected for 2016 as shown below.
The 2010 Tax Relief Act increased the AMT exemption amounts, but only for 2010 and 2011, so the AMT exemptions reverted to their statutory amounts for 2012: $45,000 for married individuals filing jointly, less 25% of alternative minimum taxable income (AMTI) exceeding $150,000; and $33,750 for unmarried individuals, less 25% of AMTI exceeding $112,500.
The Jobs and Growth Tax Relief Reconciliation Act of 2003 raised the AMT exemptions to $58,000 for married individuals filing a joint return and surviving spouses, and $40,250 for individuals for 2003 and 2004, up from $49,000 and $35,750 respectively.
While the tax, at its inception, affected just a small number of taxpayers, its reach has grown over the years, particularly since the AMT exemptions and tax bracket amounts are not indexed for inflation.
Note that without the MFS penalty, the tax liabilities and the total AMT exemptions phased out are equal for both joint and separate filing status.
New AMT Exemptions for Individuals 2010 2011 Joint return $72,450 $74,450 Single return Married filing 47,450 48,450 separately 36,225 37,225
Since then, the impact of the AMT has increased partially because the AMT exemptions have not been automatically indexed annually for the effects of inflation, whereas various parameters of the ordinary income tax (such as tax brackets, exemptions, etc.
TIPRA Section 301 includes some relief from the AMT for 2006, via a temporary increase in the AMT exemptions, which will be $62,550 for those married filing jointly and $42,500 for single taxpayers (compared to $58,000 and $40,250, respectively, as provided in the Working Families Tax Relief Act of 2004).
Instead of really fixing the way the AMT is calculated by indexing it to inflation, Congress just extended AMT exemptions for one-year, choosing to ignore the long-term problem.
And AMT exemptions, designed to limit the burden, are not always available -- especially to joint filers.
The individual AMT exemptions for 2007 are $66,250 for married taxpayers, and $44,350 for single taxpayers.