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What is AMT – Alternative Minimum Tax

TaxBizPro, LLC Posted on: February 5, 2010 13:40

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.
Alternative Minimum Tax Rate and Exemption Amounts
1986–1990 1991–1992 1993–2000 2001–2002 2003–2005 2006 2007 2008 2009 2010 2011 2012
Individual Tax rate 21% 24% 26/28% 26/28% 26/28% 26/28% 26/28% 26/28% 26/28% 26/28% 26/28% 26/28%
Married Filing Jointly 40,000 40,000 45,000 49,000 58,000 62,550 66,250 69,950 70,950 72,450 74,450 TBD
Single or Head of Household 30,000 30,000 33,750 35,750 40,250 42,500 44,350 46,200 46,700 47,450 48,450 TBD
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:
Posted in:Personal Tax ArticlesThis article was written by TaxBizPro, LLC 2017, all rights reserved ©.  

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