AMT: What You Need to Know for 2024 and Beyond

ARTICLE | February 24, 2025

Authored by Vasquez + Company

With the approach of 2024, the alternative minimum tax (AMT) remains a consideration for individuals who may be subject to thresholds, deductions, and preferences that differ from the regular federal income tax system. This article offers an in-depth look at how the AMT works, what changes brought about by recent tax reforms mean for various taxpayers, and how best to navigate potential pitfalls.

Although the Tax Cuts and Jobs Act (TCJA) raised AMT exemption levels and reduced the number of people who must pay the AMT, certain high-income taxpayers and those with specific financial considerations can still be affected. Being informed about how the AMT is calculated and taking advantage of planning opportunities can help mitigate its impact.

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For most moderate-income taxpayers, the AMT has become less of a concern due to the TCJA’s higher exemption and phaseout thresholds. Yet certain individuals—with high income, large capital gains, significant private-activity bond holdings, a habit of exercising ISOs, or older depreciable assets—should still be aware of the AMT and its potential to increase their tax liability. By understanding how the AMT works, watching for its common triggers, and planning ahead, you can help ensure that this alternative system doesn’t catch you off-guard for the 2024 tax year and beyond. As always, collaborating with an experienced tax advisor is the best approach to keeping your tax liability as low as possible under both sets of rules.

Our firm provides the information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. This article is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.