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ISO AMT Calculator (2025) – Incentive Stock Options

Estimate AMT from exercising ISOs in 2025. Enter shares, strike, FMV, income and see estimated AMTI, exemption and tentative minimum tax.

Calculate Your Results
Adjust the values to see how your numbers change
Bargain Element (AMT Adjustment)
$0
AMTI (Before Exemption)
$0
AMTI (After Exemption)
$0
Tentative Minimum Tax (TMT)
$0
Estimated AMT Owed
$0
Notes
This simplified model does not include AMT credit, preference items beyond ISO adjustment, nor exemption phase-out.

What is the ISO AMT Calculator?

The ISO AMT Calculator helps estimate the Alternative Minimum Tax (AMT) impact when you exercise Incentive Stock Options and hold the shares. The difference between fair market value (FMV) at exercise and the strike price—known as the bargain element—counts as an AMT preference item and may increase your AMTI for the exercise year.

This tool uses simplified current-year assumptions for AMT exemption and thresholds and applies the 26%/28% AMT rates. You can override defaults to match your filing status and income situation.

How to Use This Calculator

  1. Enter ISO details - Input number of shares, strike (exercise) price, and FMV at exercise.
  2. Enter your income & regular tax - Add regular taxable income and your regular tax liability for the year.
  3. Adjust AMT parameters - Optionally override AMT exemption and 28% threshold for 2025.
  4. Review results - See bargain element, AMTI, tentative minimum tax, and estimated AMT owed.

Calculation Formula & Example

The Formula

AMTI = Regular Taxable Income + Bargain Element − AMT Exemption; TMT = 26%/28% on AMTI after exemption; AMT Owed = max(0, TMT − Regular Tax)

Where:

  • Bargain Element = (FMV at exercise − Strike price) × Shares
  • AMTI = Alternative Minimum Taxable Income
  • TMT = Tentative Minimum Tax (26%/28%)

Example Calculation

Example (2025):

  • Shares: 1,000; Strike: $5; FMV at Exercise: $25 ⇒ Bargain Element = $20,000
  • Regular Taxable Income: $120,000; Regular Tax: $18,000
  • AMT Exemption: $135,000; 28% threshold: $235,000

Step: AMTI = 120,000 + 20,000 = $140,000; After exemption = $5,000

Step: TMT = 26% × $5,000 = $1,300

Result: AMT Owed = max(0, 1,300 − 18,000) = $0

Benefits of Using This Calculator

  • Plan ISO exercises - Estimate AMT impact before exercising to avoid unexpected tax bills.
  • Adjust assumptions - Override exemption/threshold to match filing status and current IRS values.
  • Compare scenarios - Test different share counts or FMVs to plan multi-tranche exercises.

Calculator Use Cases

Pre-exercise planning

Model potential AMT before exercising a large ISO grant.

Year-end estimate

Estimate AMT after several exercises during the year.

Advisor discussion

Bring structured numbers to your CPA or financial planner.

Frequently Asked Questions

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