Alternative Minimum Tax: A Simplified Example

The Tax Cuts and Jobs Act made changes to medical deductions, state and local taxes, home mortgage interest, miscellaneous itemized deductions, personal exemptions and standard deductions—some of which may have triggered AMT for the average taxpayer.
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[Jason_Maier]

What about the Standard deduction?

How does that figure into AMT?

[earthwerms]

would be nice if you wouldve shown what the amt tax rate was and shown how to determine that when amt is the reason we are watching this video.... we already know how to calculate taxable income.

[samuelkwon]

What about individual AMT exemptions (not personal & dependency exemptions) to get AMTI? Was it left out so that example is simple for people to understand?

[HureyMurey]

Thanks for posting such an informative video! A question on LTCG, usually LTCG is less than 20% but with AMT, it used to rise to 25-30% in 2017 AMT. Could you please comment on if LTCG will be calculated at the standard 15% with the new tax act?

[DimitriSLouis]

I'm trying to figure out how the AMT was calculated using the 2017 numbers and I'm off by exactly $1k. I get $62, 471 instead of $63, 471. Can someone tell me what I'm doing wrong? Here's my math:

Income over phaseout threshold:
289, 000 (income) - 160, 900 (phaseout threshold) = 128, 100 (income over phaseout threshold)

Amount of exemption that is "phased out" and needs to be added back in:
128, 100 (income over phaseout threshold) * 0.25 (phaseout amount per dollar) = 32, 025 (amount of exemption that is "phased out" and needs to be added back in)

Taxable AMT income:
289, 000 (income) - 84, 500 (exemption amount) + 32, 025 (portion of exemption that was phased out) = 236, 525 (taxable AMT income)

Amount of income taxed at 28%:
236, 525 (taxable AMT income) - 187, 800 (amount taxed at 26%) = 48, 725 (amount of income taxed at 28%)

AMT:
187800 (amount taxed at 26%) * 0.26 + 48725 (amount taxed at 28%) * 0.28 = 62, 471