Question 1

What is AMTI?

Accepted Answer

Alternative Minimum Taxable Income is your regular taxable income plus AMT preference items and adjustments. Common additions include state/local tax deductions (SALT), incentive stock option bargain elements, and certain depreciation differences.

Question 2

Who typically owes AMT?

Accepted Answer

AMT primarily affects taxpayers with income between $200,000 and $1,000,000 who have large SALT deductions, ISO exercises, or significant tax preference items. The high exemption amounts and SALT cap under TCJA/OBBBA have reduced the number of AMT payers.

Question 3

What did the OBBBA change for AMT?

Accepted Answer

The OBBBA made the higher AMT exemption amounts permanent and reset the phaseout thresholds to $500,000 (single) and $1,000,000 (MFJ), indexed for inflation. The phaseout rate remains at 25 cents per dollar of AMTI above the threshold per IRC Section 55(d)(3).