IRS TAX TIP 2004-51
Before mailing your federal income tax return, check to make sure you
aren't subject to the alternative minimum tax. The IRS says that in recent
years, more and more people have found themselves subject to the AMT.
The tax law gives preferential treatment to some kinds of income and
allows special deductions and credits for some kinds of expenses.
Taxpayers who benefit from these provisions of the law may have to pay an
additional tax called the alternative minimum tax. It is a separate tax
computation that, in effect, eliminates many deductions and credits and
creates a tax liability for an individual who would otherwise pay little
or no tax.
For 2003, the exemption amounts for figuring the AMT have increased. The
amount depends on your filing status. You may have to pay AMT if your
taxable income for regular tax purposes, combined with certain adjustment
and tax preference items, is more than the exemption amounts below:
- $58,000 if you are married filing a joint return or a qualified
widow(er),
- $40,250 if you are single or head of household, or
- $29,000 if you are married filing a separate return.
The adjustments and tax preference items include such things as: standard
or certain itemized deductions, taxable state and local tax refunds,
accelerated depreciation of certain property, intangible drilling costs,
certain tax exempt interest and the difference between AMT and regular tax
gain or loss on the sale of property, treatment of incentive stock options
and depletion allowances.
If you meet the criteria noted above and have several of the listed tax
preference items, you should determine whether you might be liable for
AMT. For details, see the instructions for Form 1040, line 42, and Form
6251, "Alternative Minimum Tax," and its instructions.
Forms and their instructions are available on the IRS Web site at
www.irs.gov.
