Source: IRS.gov
Updated 3/8/2011
The
Alternative Minimum Tax attempts to ensure that anyone
who benefits from certain tax advantages pays at least
a minimum amount of tax. The AMT provides an alternative
set of rules for calculating your income tax. In general,
these rules should determine the minimum amount of
tax that someone with your income should be required
to pay. If your regular tax falls below this minimum,
you have to make up the difference by paying alternative
minimum tax.
Here are six facts
the Internal Revenue Service wants you to know about
the AMT and changes for 2010:
1. Tax laws
provide tax benefits for certain kinds of income and
allow special deductions and credits for certain expenses.
These benefits can drastically reduce some taxpayers’
tax obligations. Congress created the AMT in 1969,
targeting higher-income taxpayers who could claim
so many deductions they owed little or no income tax.
2. Because
the AMT is not indexed for inflation, a growing number
of middle-income taxpayers are discovering they are
subject to the AMT.
3. You may
have to pay the AMT if your taxable income for regular
tax purposes plus any adjustments and preference items
that apply to you are more than the AMT exemption
amount.
4. The AMT
exemption amounts are set by law for each filing status.
5. For tax
year 2010, Congress raised the AMT exemption amounts
to the following levels:
•
$72,450 for a married couple filing a joint return
and qualifying widows and widowers
• $47,450 for
singles and heads of household
•
$36,225 for a married person filing separately
