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February 19, 09
NEWS / Seven Facts to Help You Understand the Alternative Minimum Tax1. 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. The Alternative Minimum Tax attempts to ensure that anyone who benefits from these tax advantages pays at least a minimum amount of tax. 2. Congress created the AMT in 1969, targeting a small number of high-income taxpayers who could claim so many deductions they owed little or no income tax. 3. Because the AMT is not indexed for inflation, a growing number of middle-income taxpayers are discovering they are subject to the AMT. 4. 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. 5. The AMT exemption amounts are set by law for each filing status. 6. For tax-year 2008, Congress raised the alternative minimum tax exemption to the following levels: * $69,950 for a married couple filing a joint return and qualifying widows and widowers * $46,200 for singles and heads of household * $34,975 for a married person filing separately 7. Taxpayers may find more information about the Alternative Minimum Tax and how it impacts them by referring to IRS Form 6251, Alternative Minimum Tax —Individuals, available on IRS.gov or by calling 800-TAX-FORM (800-829-3676). Tags: irs form, |
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