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The Alternative Minimum Tax or AMT is a provision of the federal tax code originally enacted to close certain tax loopholes enjoyed by the very rich.
The alternative minimum tax was originally enacted when it was discovered that certain wealthy individuals paid no income taxes on substantial income by investing exclusively in tax free bonds.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
- 3 Reasons This Oil Stock is a Better Buy Than Linn Energy Today
- How Do Savings Bonds Work?
- The SIMPLE IRA: A Retirement Savings Solution for the Self-Employed
- How Do You Compare With the Average American?
- How Much Should You Contribute to Your 401(k), and How Should You Invest It?
- Read This Before You File Your Tax Return
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.|