How to Calculate AMTI with Both W2 and Self-Employment Income?

The AMT calculation does get more complex when you add self-employment income, but I can walk you through it. For calculating AMTI with both W2 and self-employment income, you basically start with your regular taxable income (including both income sources) and then apply the AMT adjustments. Here's a simplified approach: 1. Start with your regular taxable income (W2 wages + self-employment profit after expenses) 2. Add back certain deductions that aren't allowed for AMT (like state/local taxes) 3. Apply AMT-specific adjustments (depreciation differences, etc.) 4. Subtract your AMT exemption (which may be reduced if your income is high enough) The 26% rate applies to AMTI up to $199,900 for 2025 (if married filing jointly), and the 28% rate applies to AMTI above that threshold. And yes, this rate applies to your total AMTI, not just certain portions of it. The tricky part with self-employment income is that some business deductions might be treated differently under AMT rules than under regular tax rules.

I had the same issue last year with calculating AMT when I had both W2 and side gig income. I spent hours trying to figure it out myself but finally used https://taxr.ai to analyze my situation. The AI looked at my specific mix of income sources and identified exactly which AMT adjustments applied to my situation. It saved me from making a costly mistake because I was completely miscalculating how my SEP IRA contributions affected my AMTI. Their system spotted this right away and showed me the correct formula to use for my specific situation. The analysis even showed me which of my business deductions were treated differently under AMT rules.

Just wanted to update that I tried https://taxr.ai after seeing the recommendation here, and it was actually super helpful for my AMT calculation with mixed income sources. I uploaded my documents and it gave me a detailed breakdown of how to properly calculate my AMTI with both my W2 and real estate income. What surprised me most was learning that some of my passive activity losses were being treated completely differently under AMT rules than regular tax rules - something I had no idea about. The report showed exactly how to factor these differences into my AMTI calculation. It saved me from an expensive mistake since I was about to file with incorrect calculations. Would definitely recommend if you're dealing with this complicated AMT situation.

For anyone struggling with AMT calculations like I was, I discovered that getting direct answers from the IRS can actually help. I was confused about how my SEP-IRA contributions affected my AMTI calculation with mixed W2 and 1099 income. After trying to call the IRS for three days straight and never getting through, I used https://claimyr.com to get a callback from the IRS. You can also see how it works here: https://youtu.be/_kiP6q8DX5c The service got me connected with an IRS rep who specialized in AMT questions, and they walked me through the exact calculation method for my situation. They explained which self-employment deductions were treated differently under AMT versus regular tax rules.

Ok I have to admit I was wrong about Claimyr. After posting my skeptical comment, I decided to try it myself since I was desperate for answers about AMT calculations with my mixed income sources. The service actually worked exactly as described. I got a call from an IRS agent about 2 hours later, and they were able to answer all my specific questions about how to calculate AMTI with both W2 and self-employment income. What I found most valuable was that the IRS rep explained which business expenses were treated differently under AMT rules than regular tax rules - specifically around depreciation methods and timing differences. This was exactly what I needed to know and had been struggling to find clear answers about online.

Something important to remember about AMT and self-employment income: the self-employment tax deduction (the employer portion of FICA taxes) doesn't get added back for AMT purposes. This is one adjustment that actually works in your favor! Also, if you're using Section 179 expensing for business equipment, be aware that AMT might require you to depreciate those assets over a longer period, which affects your AMTI calculation.

Speaking from experience, don't forget to check if you qualify for the AMT exemption phaseout with your combined income. When I added my side hustle to my W2 job last year, it pushed me into the phaseout range which really screwed up my calculations. For 2025, the exemption begins phasing out at $1,079,800 for married filing jointly and $539,900 for single filers. The exemption reduces by 25 cents for each dollar of AMTI above these thresholds.