We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
Written by
AJ Dellinger
Edited by
Tori Rubloff
Tori Rubloff is an editor at Bankrate, where she manages staff writers, copyedits feature articles and oversees production of data-driven, timely content that empowers readers to make informed decisions about their finances.
Bankrate logoAt Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity , this post may contain references to products from our partners. Here's an explanation for how we make money .
Bankrate logoFounded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.
Our banking reporters and editors focus on the points consumers care about most — the best banks, latest rates, different types of accounts, money-saving tips and more — so you can feel confident as you’re managing your money.
Bankrate logoBankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
Bankrate logoYou have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range, can also impact how and where products appear on this site. While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service.
The alternative minimum tax, or AMT, is a different, yet parallel, method to calculate a taxpayer’s bill. It applies to people whose income exceeds a certain level and is intended to close the loopholes that allow them to reduce or eliminate their tax payments. It’s adjusted each year for inflation.
The AMT has its own set of rates (26 percent and 28 percent) and requires a separate calculation from regular federal income tax. Basically, it’s the difference between your regular tax bill, based on ordinary income tax rates, and your AMT bill, determined by completing IRS Form 6251: Alternative Minimum Tax — Individuals. When there’s a difference, you may have to pay the AMT amount in addition to your regular tax.
The AMT increases the amount of income that is taxed for high earners. It adds items that are not taxed on the standard tax rates and rejects or reduces many common tax breaks used by individual taxpayers to lower their IRS bills.
To be required to pay the AMT, you must have earned more than the minimum level in the chart below.
| Filing status | 2022 AMT exemption |
|---|---|
| Single or head of household | Up to $75,900 |
| Married, filing separately | Up to $59,050 |
| Married, filing jointly | Up to $118,100 |
Anyone who exceeds the income levels in the above chart may be subject to the AMT. However, reaching those levels does not automatically trigger the AMT. You can complete IRS Form 6251 by hand, use tax software programs or hire a professional tax preparer to determine if you owe the AMT and, if so, calculate the amount you owe.
The IRS has set income levels to determine which rate you’re charged for your AMT. If your income is below the stated level in the chart below, you’re taxed at 26 percent. If your income is over the stated level, you’re taxed at a rate of 28 percent on the excess income.
| Filing status | 2022 AMT tax rate income level |
|---|---|
| Single or head of household | $206,100 |
| Married, filing separately | $103,050 |
| Married, filing jointly | $206,100 |
This means that for a single person who earned more than $75,900 in 2022, but less than $206,100, the AMT rate is 26 percent. If that person earned more than $206,100, the AMT tax rate goes up to 28 percent.
The AMT exemption — the amount of income taxpayers can exempt before triggering AMT — eventually phases out at 25 cents per dollar earned once income has reached the thresholds in the chart below. In other words, you can no longer exempt any income from the AMT if your income surpasses these levels.
| Filing status | 2022 AMT phaseout threshold |
|---|---|
| Single or head of household | $539,900 |
| Married, filing separately | $539,900 |
| Married, filing jointly | $1,079,800 |
With the AMT, many of the items you could deduct for your standard taxes no longer apply. Under the AMT:
Additional tax breaks not allowed under the AMT that affect predominantly high-income people are:
Determining your financial liability as a result of the AMT can be complicated. Tax software programs or a tax professional may be the best way to determine what you owe. Once you complete this year’s tax return, seek the guidance of an accountant or tax professional to find ways to potentially reduce your tax liability going forward.
