Twin Cities Business Daily

What Medical Expenses are subject to the Alternative Minimum Tax?

The Alternative Minimum Tax may affect many people because of deductions they claimed for medical expenses (in addition to other things). I'm wondering what "medical expenses" means. Is there a even a single definition or does the criteria differ from household to household?

Public Comments

1. Look at the form 6251. There you will see the slight adjustment for medical expenses. The term medical expenses is covered by irs publication 502.
2. The short answer to your question is: all medical expenses that you currently are used to deducting. If you itemize, you have to figure your AMT as well as your regular tax and pay the higher of the two. When you calculate your Alternative Minimum Tax, you take your regular Adjusted Gross Income and add back most of your itemized deductions (including medical and state and local taxes) as well as a whole bunch of other things that you can normally help yourself lower your tax liability with, and then calculate your AMT on the income less a different "exemption", which replaces the exemptions AND deductions of the regular tax system. Long story short, if having a lot of medical bills and/or high state and local taxes (among a lot of other things) has helped you keep your taxes low, AMT aims to stop that. Just pray that Congress keeps doing their annual dance of raising the AMT exemption for one more year. They almost didn't this year and it almost cost 20-30 million people a LOT more tax. They need to index it to inflation like everything else in the tax code so only the rich are affected like it was intended when they dreamt it up, but they don't have the stones to address that problem permanently, just like any other problem!