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So in 2018, the US has new tax laws with much higher standard deduction. How does this work with AMT income calculation. That's typically done by using the regular income and adding in certain deductions (property tax, state income tax, etc.).

What happens if I don't itemize but just take the standard deduction. I can't add back any itemized deductions, since I don't itemize. Let's say I have $150000 in federal income, $6000 in state tax, $5000 in property tax and $4000 in charitable donations. Since this is less than $24000, I would simply take the standard deduction and the individual amounts don't show up anywhere on the tax form.

How would the AMT income be calculated in this example?

  • You asked another, nearly identical question Calculating 2018 AMT from taxable income – JoeTaxpayer Oct 1 '18 at 0:24
  • @JoeTaxpayer. Sorry, that was intended to be two different question. This one was about standard vs itemized deductions. The answer apparently is non-trivial: It seems that if you are paying ATM you may be better off itemizing even if that's below the standard deduction. At least you get to deduct charitable contributions. The impact on the regular tax doesn't matter, since you pay the TMT and the AMT is just a means to obfuscate this. – Hilmar Oct 2 '18 at 2:24
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You can basically follow the previous year's forms, but with new values for some of the limits used in the calculations. If you look at the 2017 Form 6251, if you take itemized deductions, you would take the line from Form 1040 from after subtracting deductions and put it on Form 6251 line 1 , and add some of the deductions back in (Form 6251 lines 2-6). If you take the standard deduction, then you would just take the line from Form 1040 from before subtracting deductions into Form 6251 line 1, and skip lines 2-6 (or, equivalently, you can think of it as adding the entire standard deduction back in). In other words, there is no standard deduction in the AMT; but the AMT has an "exemption" (which is increased in 2018) that works similarly.

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