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Seven Facts to Help You Understand the Alternative Minimum Tax
The Alternative Minimum Tax
attempts to ensure that anyone who benefits from certain tax advantages
pays at least a minimum amount of tax.
Here are seven facts the Internal Revenue Service wants you to know about
the AMT and changes to this special tax for 2009.
1. 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. Congress created the Alternative Minimum Tax in 1969, targeting taxpayers who could claim so many deductions they owed little or no income tax.
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2. Because the Alternative Minimum Tax is not indexed for inflation, a growing number of middle-income taxpayers are discovering they are subject to the Alternative Minimum Tax
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3. You may have to pay the Alternative Minimum Tax if your taxable income for regular tax purposes plus any adjustments and preference items that apply to you are more than the Alternative Minimum Tax exemption amount.
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4. The Alternative Minimum Tax exemption amounts are set by law for each filing status.
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5. For
tax year 2009, Congress raised the Alternative Minimum Tax exemption
amounts to the following levels:
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6. The minimum Alternative Minimum Tax exemption amount for a child whose unearned income is taxed at the parents' tax rate has increased to $6,700 for 2009.
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| 7. If you claim a regular tax deduction on your 2009 tax return for any state or local sales or excise tax on the purchase of a new motor vehicle, that tax is also allowed as a deduction for the Alternative Minimum Tax. |
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