TaxBizPro, LLC posted on February 05, 2010 13:40
This material was prepared by TaxBizPro, LLC ©: 2010
The Alternative Minimum Tax was designed to ensure that anyone who benefits from certain tax deductions pays at least a minimum amount of tax.
Tax laws provide tax benefits for special tax deductions and tax credits for certain expenses. These benefits can drastically reduce taxpayers’ taxable income, thus fewer taxes will be paid. Congress created the Alternative Minimum Tax in 1969 and AMT became enforced in 1970; targeting taxpayers who could claim many tax deductions but owed little or no income tax.
Currently the AMT is not indexed for inflation, thus a growing number of middle-income taxpayers are discovering they are subject to the AMT and owe more taxes that they were expecting. If your taxable income and any tax adjustment are higher than the AMT exemption amount, you will most likely pay the AMT. The AMT exemption amounts are set by law for each filing status.
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AMT Exemption Amounts
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Filing Status
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1986-1992
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1993-2000
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2001-2002
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2003-2005
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2006 only
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2007 only
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2008 only
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2009 only
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Married Filing Jointly
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40,000
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45,000
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49,000
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58,000
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62,550
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66,250
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69,950
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70,950
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Single or Head of Household
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30,000
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33,750
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35,750
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40,250
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42,500
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44,350
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46,200
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46,700
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For For tax year 2009, Congress raised the AMT exemption amounts to the following levels:
- $70,950 for a married couple filing a joint return and qualifying widows and widowers;
- $46,700 for singles and heads of household;
- $35,475 for a married person filing separately.
Taxpayers can find more information about the Alternative Minimum Tax and how it impacts them by accessing IRS Form 6251, Alternative Minimum Tax —Individuals, and its instructions below.
Click on the link below: