Alternative Minimum Tax (AMT)
December 4, 2008 by: The Tax Man
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The Alternative Minimum Tax parallels the regular income tax: taxpayers whose AMT liability exceeds their regular tax liability pay the difference as AMT.
The AMT replaces personal exemptions and some deductions (most notably, the standard deduction and the deduction of state and local taxes) with an AMT exemption and applies two tax rates-26% on the first $175,000 and 28% on any excess-to the resulting AMT taxable income.
Unlike the regular income tax, the AMT is not indexed for inflation. Thus, ever more taxpayers owe AMT as that liability rises relative to regular tax liability
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