2007 AMT Exemption Increased

In computing the alternative minimum tax (AMT) for individuals, the AMT tax rate is applied against the taxpayer's alternative minimum taxable income (AMTI), as reduced by the taxpayer's exemption amount (which phases out for AMTI above certain threshold levels). Pre-2007 Tax Increase Prevention Act law provided the following AMT exemption amounts for tax years beginning in 2007:

$33,750 for unmarried individuals who aren't surviving spouses;

$45,000 for married couples filing jointly and surviving spouses; and 

$22,500 (technically, 50% of the joint return/surviving spouse amount) for married individuals filing separately.

For tax years beginning in 2006, the AMT exemption amounts were:

• $42,500 for unmarried individuals who weren't surviving spouses;
• $62,550 for married couples filing jointly and surviving spouses; and
• $31,275 for marrieds filing separately.