AMT Income Subject to AMT

Once you determine your alternative minimum tax income you can then subtract an exemption amount based on your filing status: $66,250 if you are married filing jointly or a surviving spouse; $44,350 if you are single or a head of household; $33,125 if you're married filing a separate return.

The exemption is phased out, however for taxpayers whose alternative minimum tax income exceeds certain levels. It begins to disappear when alternative minimum tax income hits $150,000 for taxpayers filing joint returns, $112,500 on individual and head of household returns, and $75,000 if you are married filing separately. For every $100 of excess income, the exemption shrinks by $25 until it is completely phased out.

The net amount is your AMT Income Subject to AMT. This amount will be multiplied by the appropriate tax rates (beginning at 26% and then 28% on amounts exceeding a threshhold) to determine your tentative AMT.