2007 AMT Exemption

Find out if the alternative minimum exemption set by Congress will keep you from filing Form 6251.

February 2008

At the end of 2007, Congress approved a long-expected, alternative minimum tax patch. The patch increases the AMT exemption, which is basically a standard deduction for taxpayers hit by the alternative minimum tax.

Without the patch, 2007 exemptions would have fallen from "patched" 2006 levels ($42,500 for single taxpayers and $62,550 for married taxpayers filing jointly) to pre-patch levels of $33,750 for singles and $45,000 for married couples.

The stunted exemptions would have pushed an estimated 19 or 20 million taxpayers into the grasp of the AMT -- boosting their tax bills by an average of more than $2,000 each. As a group, the taxpayers would have paid an extra $50 billion in taxes.

The patch approved by Congress and signed into law by President Bush, prevents that from happening.

Under the new law, the 2007 exemption amounts are:

Single taxpayers: $44,350

Married taxpayers filing jointly: $66,250

Married filing separately: $31,275

Head of Household: $44,350

The latest patch is a one-year-only fix . . . which means Congress will have to address this issue again for 2008, but 2009 is the year expected for permanent reform.

Return to the AMT Tax Guide

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