Alternative Minimum Tax (AMT) can be defined as an extra tax assessment added to your income tax calculation because your income exceeds a certain threshold and other items are present on your tax return giving rise to AMT.
Below are two graphs showing when AMT is most likely to be triggered for single taxpayers and married filing jointly (please click to see a larger image).
AMT was enacted several decades ago in order to make the tax collections “fairer” by not letting wealthy individuals to get away with paying little or no tax.
If your prior year return shows an AMT or you believe your current year income may trigger an AMT, you should talk to us. We can devise a strategy to minimize (or, in some cases, completely eliminate) AMT as an add-on to our tax planning service.