How to use the AMT
Tax calculations depend on jurisdiction, filing status, and income mix. This calculator handles the core arithmetic — enter your figures, review the output, then cross-reference with official brackets or a CPA for high-stakes decisions.
Key inputs to get right
- Gross vs. adjusted gross income (AGI): many deductions reduce AGI before tax rates apply. Use AGI, not gross, unless the tool specifies otherwise.
- Filing status: single, married filing jointly, married filing separately, and head of household each have different bracket thresholds.
- Pre-tax contributions: 401k, HSA, and FSA contributions reduce taxable income. Include them before running the calculation.
Common mistakes
- Confusing marginal rate (the rate on the last dollar) with effective rate (total tax divided by income). They're different — most people pay far below their marginal bracket.
- Ignoring state and local taxes, which can add 0–13% depending on where you live.
- Forgetting self-employment tax (15.3%) if you're a freelancer — it's in addition to income tax.
When to re-run this calculation
Tax situations change: new income sources, marriage or divorce, a new home, starting a business, or a change in state residency all shift your tax picture. Re-run when anything material changes, and quarterly if you make estimated payments.
Frequently Asked Questions
How accurate are the results?
The AMT applies a standard formula to your inputs — accuracy depends on how precisely you measure those inputs. For planning and estimation, results are reliable. For high-stakes or professional decisions, cross-check the output with a domain expert or primary source.
Does this account for state taxes?
This calculator focuses on the federal calculation. State income tax rates vary from 0% (no state tax) to over 13% and would need to be added to the total tax burden separately. Check your state's revenue department for current rates.