Deductions Are You at Risk? The more deductions that taxpayers claim, the more vulnerable they may be to the AMT. If your taxable income, with certain adjustments, is above the AMT exemption amount (based on your filing status), you should complete Form 6251, Alternative MinimumTax, to see whether you owe the AMT. Another way to determine whether you owe the AMT is to complete the worksheet for line 45 in the Form 1040 Instructions. Any of the following circumstances could trigger AMT liability: • Substantial income • Incentive stock options exercised during the year • Passive income or losses • Interest income from private-activity bonds • Significant itemized deductions, including state & local taxes and unreimbursed medical expenses Source: Internal Revenue Service
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