The AMT is a separate and parallel tax system originally introduced to target taxpayers who might otherwise pay little or no regular tax because of the use of certain deductions. The new tax law introduced modifications to the AMT for tax years 2018–2025 that will likely result in many fewer taxpayers being liable for AMT.

The new tax law significantly increases the exemption amounts and the phase-out thresholds for AMT from their 2017 amounts. For 2018:

  • for married taxpayers filing jointly, the exemption amount is increased from $84,500 to $109,400 and the phase-out threshold is increased from $160,900 to $1,000,000
  • for married taxpayers filing separately, the exemption amount is increased from $42,250 to $54,700 and the phase-out threshold is increased from $80,450 to $500,000
  • for all other individuals the exemption amount is increased from $54,300 to $70,300 and the phase-out threshold is increased from $120,700 to $500,000.

Certain situations, including the exercise of incentive stock options (ISOs), can trigger AMT liability for taxpayers who would not ordinarily be subject to it. However, the changes introduced by the new tax law make it more likely that even if you were subject to AMT in prior years, this is less likely to be the case in tax years 2018–2025.

In calculating AMT, certain itemized deductions are disallowed. You are allowed only these itemized deductions:

  • Medical expenses to the extent they exceed 7.5% of your AGI
  • Deductible casualty losses
  • Charitable contribution deductions
  • Deductions for interest expense on debt specifically incurred to acquire, construct, or substantially rehabilitate your residence
  • Investment interest expense up to the net income you derive from investments.
Tax Cuts and Jobs Act of 2017

Your alternative minimum taxable income, less any applicable AMT exemption, is multiplied by the applicable rate and reduced, within certain limitations, by any allowable foreign tax credit. If the resulting minimum tax exceeds your regular tax, you are subject to an AMT liability equal to the difference.

Note: that the 3.8% tax on an individual’s net investment income—also known as the “net investment income tax,” discussed in Investment Related Tax Issues —is not taken into consideration in determining whether, and how much, AMT liability is imposed.

Minimum tax credit

If you have an AMT liability because of certain deductions or credits not fully allowed for AMT (“non-exclusion preferences”), you can use the minimum tax credit to decrease your regular tax liability in a later year. In most cases, this credit reduces the impact of the AMT by effectively refunding some or all of the AMT paid. Thus, in some cases, AMT planning may be a matter of timing—payment of AMT now and reduction of regular tax in the future.


At Nugent & Associates, we're not just number crunchers. We bring over 3 decades of invaluable certified public accounting and tax expertise to your company – serving as business and financial strategists who can offer such services as tax and financial planning, investment advice, diligent financial records, and help with estate planning.

Even better, we will give you time to focus on what you do best: running the day-to-day operations that drive your business toward success.

Take advantage of our FREE and no obligation business checkup.

We will visit you at your business at a time and day convenient for you, analyze your numbers, discuss your goals and concerns and report back with a complimentary detailed written analysis to help your business succeed!

At Nugent & Associates, we're not just number crunchers. Our people bring decades of invaluable certified public accounting and financial and tax expertise to you – offering tax and financial strategies to individuals such as yourself. If you have any questions or concerns about your own tax, financial or investment matters, please do not hesitate to contact us.

Experienced tax and financial experts are not just for the super rich. At a reasonable fee you too can maximize your wealth and receive professional guidance for retirement, and/or any tax issues you may be facing, no matter your situation, with a tax and financial expert as your consultant.

Contact Nugent & Associates today. We don't charge for phone calls. You may just find you found an ally in your quest to have a great financial future.

After all, at Nugent & Associates, we succeed when you succeed!



This page is intended to be informational. This website, nor any of the information contained on this site constitutes professional, business, tax or legal advice and is not a substitute for such advice nor does it create a professional-client relationship between you and Nugent & Associates.

State and federal laws change frequently, and the information in this page may not reflect your own state’s laws or the most recent changes to the law.

The information contained within this website should not be considered as a solicitation or an offer for a professional-client relationship. Materials contained in this website are of a general nature and should not be substituted for professional advice. Nugent & Associates is providing this website and the information contained herein only as a convenience to you. Nugent & Associates assumes no liability or responsibility for any errors or omissions contained within this website. There is no guarantee that the information included on this site is current, accurate, complete, useful, or reliable.

Tax Planning & Preparation

We assist our clients in individual and business tax planning throughout the year.

Nugent & Associates provides:
  • Year-Round analysis to ensure a smooth and predictable year-end close.
  • Assist in establishing retirement planning.
  • Performs in-depth review of all deductions available.

Financial Statements

Nugent & Associates offers outstanding accounting services and acts as a quasi-controller for companies who do not employ their own full-time accountants.

This allows our clients with more time to focus on new services, new customers and other core business issues.

Business Planning, Budgeting
& Growth Strategies

Nugent & Associates assists it clients with:
  • Starting a new venture, product or service
  • Expanding a current organization, product or service
  • Buying a new business, product or service
  • Turning around a declining business

QuickBooks Training
& Support Services

As Certified QuickBooks Professional Advisors, we can be of assistance with QuickBooks accounting or payroll and help increase your productivity and efficiency.