AMT is the government’s ATM machine, by Jim Brandenburg, CPA and shareholder with Kolb+Co.
The Alternative Minimum Tax (AMT) was introduced more than 40 years ago to make sure all taxpayers paid some level of tax. Over the years it has come to apply to millions of middle income taxpayers, generating billions in federal tax revenue.
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AMT is a separate tax system, with different treatments of income and deductions as well as a different tax rate. It is calculated and compared with the regular tax, and the taxpayer pays the higher of the two.
What is unusual with AMT is its complexity and that it does not allow some common deductions that are permitted for the regular tax.
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Read more here.
