Form 6251 Instructions

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Form 6251, or the Alternative Minimum Tax Form for individuals, is a form that some taxpayers must complete and file with their federal tax returns. It applies to taxpayers who receive income from sources that have favorable treatment under U.S. tax law and to taxpayers who qualify for certain business, investment and mortgage deductions.

Complete Your 1040

  • Before filling out Form 6251, complete Form 1040, the standard tax return form that you file each tax year. Copy many of the line items onto Form 6251 from line items on your 1040. Look for most of these items under the “Income” section of the 1040. Also, you need to have the total amount of federal, state and local taxes owed for the year, which you figure on Form 1040.

Filling Out the Form

  • Complete all sections of Form 6251 that pertain to you. The form has 54 lines total. Lines one through 28 deal with alternative minimum taxable income and include line items for home mortgage expenses, investment income and business expenses. Figure out your home mortgage interest adjustment by using the Home Mortgage Interest Adjustment Worksheet included with Form 6251. To determine your qualified home interest deduction, enter the total home interest you deducted and qualified mortgage insurance premiums according to the instructions on the worksheet.

    Investments earnings that you should list on Form 6251 include interest from private activity bonds and qualified small business stocks. Business expenses to list include circulation costs and property depreciation.

    Lines 30 through 35 pertain to exemptions and tax credits. Worksheets on the form help you figure out your exemptions, such as the Foreign Earned Income Tax Worksheet. Use the rest of the lines on 6251 to figure the total taxes you owe using maximum capital gains rates. Find the percentage to use to determine your total tax amount under your income total. Use this percentage to figure up the total amount of taxes owed.

    After completing Form 6251, submit the form along with your regular tax return.

References

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