How to Draft a Form 6251 Without Any Experience

Step-by-Step Guide On How to Write a Form 6251

Before discussing the steps needed to write this form, it’s important to discuss what it is. Form 6251, or the alternative minimum tax (AMT), is a tax form used by the IRS to determine the AMT amount you may owe.

If you are one of the taxpayers with a higher income, you may claim a deduction so you can reduce this regular tax obligation. This is why it is important to know the process of writing this document so you can complete it as soon as possible.

So, how do you complete this form? Here is a step-by-step guide that you can easily follow.

1. Determine whether you need to file this form

In a nutshell, every single taxpayer is required by the IRS to make an assessment. This is so you can evaluate if you are subject to the AMT every tax year. But this does not automatically mean you will need to make this payment.

There are several cases wherein the amount of income earned during the year is not enough to warrant a separate calculation. However, this will depend on your income level.

This is why you will need to carefully assess whether your income level is part of the number that needs to comply with this tax.

2. Calculate using the AMT income

After assessing, you can start writing Form 6251 by calculating your alternative minimum taxable income. One thing you have to remember is that this requires a different calculation than what you use on Form 1040.

Form 1040 is needed to calculate your taxable income. Meanwhile, Form 6251 is for your alternative minimum tax. These are two different things. But it’s also important to note that the tax calculation used on Form 6251 may reduce a few of the tax benefits you can claim on Form 1040. By opting for this, you may increase your tax bill.

When you fill out Form 6251, you will need to start with your Adjusted Gross Income (AGI). This is what you need if you won’t be itemizing your deductions. Otherwise, the form will use your taxable income. Your personal and dependent exemptions will be added back. 

To come up with your AMT income, Form 6251 will reduce or eliminate some of your deductions and losses that you originally claimed. These include your net operating losses, investment interest expense, and medical/dental deduction. 

These are just some deductions and losses that will be reduced or eliminated in Form 6251. 

3. Calculate your AMT

Next, you’ll need to calculate the adjusted minimum taxable income. Once you start drafting Form 6251, you can start making a claim on your AMT exemption based on your filing status. It’s important to note that this differs from the dependent and personal exemptions from your original tax return.

When you’re calculating your AMT, Form 6251 will subtract any exemptions you have from your adjusted minimum taxable income. This means that you will need to make an additional tax payment. Normally, this is an amount equal to the excess of AMT over the tax amount that you reported on Form 1040. 

4. Completing form 6251

Once you’re done filling out form 6251, you will need to attach this to your personal tax return. It’s important to note that the amount of AMT liable from Form 1040 will need to be transferred. Form 1040 contains a line item where you can report your AMT.