Alternative Minimum Tax
The Alternative Minimum Tax or AMT is a provision of the federal tax code originally enacted to close certain tax loopholes enjoyed by the very rich.
The alternative minimum tax was originally enacted when it was discovered that certain wealthy individuals paid no income taxes on substantial income by investing exclusively in tax free bonds. The AMT was intended to close this loophole to make sure that everyone paid a share of federal income taxes.
As the cost of living has increased middle income families are finding their income begins to encroach on the AMT limits. So far Congress has enacted annual exemptions to the AMT for the middle class, but they have failed in efforts to enact a permanent solution. AMT continues to be an annual tax issue in Congress.
Related Fool Articles
Related Community Blogs
Recent Mentions on Fool.com
- SEP IRA Rules
- The Inherited IRA: It's a Great Gift, but Learn the Rules
- Alternative Minimum Tax: What Is It and Do You Need to Worry About It?
- When A Roth 401(k) Plan Is Better Than A Roth IRA
- 5 Ways a Fixed Annuity Is Different From a Bank CD
- Better Buy: T. Rowe Price Health Sciences vs. Vanguard Health Care Fund Investor Shares
Error creating thumbnail: Unable to save thumbnail to destination
|This page still needs some extra work. The Touchstone community is working hard behind the scenes to make this page better for all of Fooldom. View all works in progress.|