How to Determine if a Taxpayer is Paying AMT
The alternative minimum tax, commonly referred to as the AMT, was designed in 1969 to ensure that wealthy taxpayers didn’t use loopholes to escape paying their fair share of taxes. The AMT has its own set of rates (26% and 28%) and requires a separate computation that could substantially boost your tax bill. Basically, it’s the difference between your regular tax bill, figured using ordinary income tax rates, and your AMT bill, figured by filling out more IRS paperwork. When there’s a difference, you must pay that amount, the AMT, in addition to your regular tax.
When an AMT payment is required, affected taxpayers could end up paying thousands more in taxes. This ultimately highlights the importance of understanding if an AMT payment is obligatory.
In light of this, in our latest video tutorial, we cover the process of determining if a taxpayer is paying Alternative Minimum Tax (AMT). Watch on Youtube at: https://www.youtube.com/watch?v=VwiOrmfnb4o
Or alternatively, watch below:
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