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Topic: Alternative Minimum Tax

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	Alternative Minimum Tax - Wikipedia, the free encyclopedia
		The AMT affects taxpayers who have what are known as "tax preference items." These include (among others) long term capital gains, accelerated depreciation, percentage depletion, and certain tax-exempt income, which are all considered to have favorable tax treatment and could trigger the alternative minimum tax.
		The deduction for state and local taxes in the normal income tax code can encourage wealthy areas to raise taxes and, in effect, redirect monies that would normally go to the federal government (and hence to residents of poorer states) to their state and local governments, where it can be spent on their own citizens.
		Thus, many Democrats favor a tax reform of the AMT that would benefit primarily those who would be objectively viewed as wealthy by the standard of the country as a whole or their incomes, although they only live what they, themselves, like to call "a middle class lifestyle".
	en.wikipedia.org /wiki/Alternative_Minimum_Tax (1530 words)

	Tax Topics - Topic 556 Alternative Minimum Tax
		The alternative minimum tax is a separately figured tax that eliminates many deductions and credits, thus increasing tax liability for an individual who would otherwise pay less tax.
		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 exemption amount.
		If you are not liable for alternative minimum tax this year but you paid alternative minimum tax in one or more previous years, you may be eligible to take a special minimum tax credit against your regular tax this year.
	www.irs.gov /taxtopics/tc556.html (282 words)

	The Alternative Minimum Tax
		For more than three decades, the individual income tax has consisted of two parallel tax systems: the regular tax and an alternative tax that was originally intended to impose taxes on high-income individuals who have no liability under the regular income tax.
		Even if complexity is mitigated by computer software, the alternative tax may cause taxpayers to change their behavior, at least to the extent that they know that the AMT may affect them.
		Because some deductions are denied under the AMT, taxpayers who know they will be subject to the AMT in a given year may be able to reduce their taxes in the subsequent year by delaying deductible expenses into that next year.
	www.cbo.gov /showdoc.cfm?index=5386&sequence=0 (3914 words)

	Alternative Minimum Tax 101
		The alternative minimum tax (or AMT) is an extra tax some people have to pay on top of the regular income tax.
		Some things that can contribute to AMT liability are mundane items that appear on many tax returns, such as a deduction for state income tax or interest on a second mortgage, or even your personal and dependency exemptions.
		But if the regular tax is lower, the difference between the two taxes is the amount of AMT you have to pay.
	www.fairmark.com /amt/amt101.htm (1164 words)

	THE ALTERNATIVE MINIMUM TAX FOR INDIVIDUALS: A GROWING BURDEN
		Although the minimum tax was small potatoes in terms of the revenue it yielded, it was a hot potato politically: in 1969, more people had written to Congress to complain about the 155 people who paid no income tax than had written about the Vietnam war.
		The rate of the minimum tax was raised from 10 percent to 15 percent and the tax base was broadened.
		The AMT and its predecessor, the minimum tax, were enacted in an attempt to target a tiny number of high-income taxpayers.
	www.house.gov /jec/tax/amt.htm (6378 words)

	Tax tip: Beware the complicated and costly AMT (Page 1 of 2)
		Tax laws keep changing, but don't be the last to know about them.
		The AMT was designed in 1969 to ensure that wealthy taxpayers didn't use loopholes to escape paying their fair share of taxes.
		Because the tax is not indexed for inflation.
	www.bankrate.com /brm/itax/tips/20010412a.asp (596 words)

	Alternative Minimum Tax, IRS and Tax
		The alternative minimum tax is a separate tax computation that, in effect, reduces the tax benefit of certain tax deductions and tax credits on your tax return, thus creating a tax liability for an individual who would otherwise pay little or no tax on his/her tax return.
		The alternative minimum tax is a separate and parallel tax system directed at taxpayers who pay little or no regular tax on their tax return because of the use of certain tax deductions.
		The individual alternative minimum tax rate is 26% on all alternative minimum taxable income in excess of an exemption of up to $58,000 on a joint tax return, $40,250 for a single or head of household person's tax return, and $29,000 for married persons who file separate tax returns.
	www.wwwebtax.com /general/alternative_minimum_tax.htm (907 words)

	Key Points on the Alternative Minimum Tax (Site not responding. Last check: 2007-11-01)
		The AMT grew out of a minimum tax that was first enacted in 1970 after it was revealed that some high-income households had paid no income taxes in prior years.
		But the tax cuts that he has championed threaten to double the number of AMT taxpayers after some small temporary fixes expire in 2005, and the President advocates making those tax cuts permanent, which will significantly increase the number of families subject to the AMT over the long term.
		The expansion occurs because the AMT is not indexed for inflation and because of the 2001 tax cut.
	www.brookings.edu /views/op-ed/gale/20040121amt.htm (1259 words)

	Alternative Minimum Tax - One Language (Site not responding. Last check: 2007-11-01)
		The AMT system uses different rules for determining taxable income and allowable deductions, and uses a simple 26/28% rate calculation to determine the Tentative Minimum Tax (TMT).
		The TMT is compared to the income tax amount calculated for the taxpayer; if the regular income tax amount is greater than the TMT, no special action is required.
		It targetted very high incomes which were subject to many exemptions under the mainstream tax code of the time.
	www.onelang.com /encyclopedia/index.php/Alternative_Minimum_Tax (240 words)

	Online NewsHour: Reviewing The Alternative Minimum Tax -- April 14, 2006
		The Alternative Minimum Tax, or AMT for short, is a tax code that runs parallel to regular income tax.
		And they chose a third path, which was to patch the income tax, add on this alternative tax so that they didn't get embarrassed when people took too much advantage of the special preferences that Congress had created.
		The problem is that you calculate your tax under the regular tax rules and under the AMT rules and you pay whichever one's higher.
	www.pbs.org /newshour/bb/economy/jan-june06/tax_4-14.html (1903 words)

	What You Need to Know About the Alternative Minimum Tax
		The Alternative Minimum Tax is a separate, "parallel" tax system with its own set of rules and tax rates that are less generous than the regular tax system.
		Worst of all, the Alternative Minimum Tax is extremely complex, and the only way you can tell if you are subject to the AMT is to calculate your taxes both ways.
		You could be eligible for a minimum tax credit, which gives you a credit in future years for some of the extra taxes you pay under the Alternative Minimum Tax rules.
	www.newyorklife.com /cda/0,3254,13728,00.html (1013 words)

	NCPA - Tax Issues - Alternative Minimum Tax Snaring More Taxpayers (Site not responding. Last check: 2007-11-01)
		When Congress discovered that 155 wealthy Americans were paying no federal income taxes, it passed the alternative minimum tax (AMT) in 1969.
		The AMT applies a 26 percent or 28 percent tax rate to total income for those taxpayers who would have $45,000 or more in exemptions and deductions under the personal income tax.
		Experts say the middle class has been drawn into the realm of alternative minimum taxes due to the 1986 tax reform act, which required treating many exemptions like tax shelters for the wealthy, and inflation.
	www.ncpa.org /pi/taxes/pd011299h.html (316 words)

	2000 YEAR
		The new tax law enacted in 2001 does little to minimize the impact of the AMT for taxpayers this year and beyond.
		Again, the AMT brackets are not adjusted for inflation, which causes much greater exposure to the tax as the years go by.
		That's because you could be eligible for the so-called minimum tax credit, which allows you to claim a credit on your tax return in future years for some of the extra taxes you paid under AMT rules.
	www.msco-cpa.com /amttips.htm (947 words)

	Alternative Minimum Tax - House Research
		The theory underlying the federal and state alternative minimum taxes is to require taxpayers who benefit heavily from some tax preferences to pay a minimum amount of tax relative to their incomes.
		The first version of the federal tax was enacted in 1969 in response to the revelation that a number of "millionaires" were paying no federal income tax.
		The federal alternative minimum tax was first enacted in 1969, the state AMT in 1977.
	www.house.leg.state.mn.us /hrd/issinfo/amttax.htm (704 words)

	Fool.com: Alternative Minimum Tax Planning
		Although the alternative minimum tax (AMT) was intended to apply to high-income taxpayers who take advantage of loopholes (called "tax preferences" in tax lingo), it can also apply to middle-income taxpayers who have not engaged in some tax planning.
		Say that you are subject to the AMT this year, but you expect to avoid it next year.
		Thus, as with the deduction for state and local taxes, you might be able to time medical deductions to avoid the AMT or at least obtain the maximum benefit from the deductions.
	www.fool.com /taxes/2000/taxes000915.htm (1211 words)

	Get ready for the alternative minimum tax
		Few Americans have heard of the alternative minimum tax, but many taxpayers are about to find out that it's the biggest financial setback they face, an IRS taxpayer advocate says.
		Olson should know: State and local taxes pushed her into the alternative minimum tax last year so now it is personal as well as professional for her.
		The alternative tax has been on the books since then, never indexed to inflation the way regular income taxes have been since 1981.
	seattlepi.nwsource.com /money/157001_taxssnag17.html (507 words)

	The Tax Foundation - Backgrounder on the Individual Alternative Minimum Tax (AMT)
		Low income taxpayers are largely unaffected by the AMT because of its standard exemption, while the wealthiest taxpayers are unaffected because they already face the nation’s highest effective tax rates under the regular income tax system.
		Two factors are causing the expansion: the non-indexation of the AMT for inflation, and the federal income tax cuts enacted in 2001 and 2003.
		Nationwide, 1.8 percent of the approximately 131,357,000 tax returns filed in the U.S. were subject to the AMT in 2003, or roughly 2,359,000 returns.
	www.taxfoundation.org /publications/show/498.html (1833 words)

	H&R Block - Advice - Tax 101 - Alternative Minimum Tax (Site not responding. Last check: 2007-11-01)
		Under AMT rules, certain deductions allowed when you compute your "regular" tax are not allowed, some items of income and deduction are computed differently, and a different rate schedule applies.
		Because the regular tax rates were decreased, more taxpayers would have been subject to the AMT this year.
		However, the Tax Increase Prevention and Reconciliation Act increased the AMT exemptions for 2006:
	www.hrblock.com /taxes/fast_facts/articles/amt_feature.html (448 words)

	USATODAY.com - Alternative minimum tax is nipping at middle-class heels (Site not responding. Last check: 2007-11-01)
		Alternative minimum tax is nipping at middle-class heels
		While the AMT rate is lower than standard income tax rates — 26% to 28%, depending on income — the loss of deductions and exemptions will result in a higher tax bill.
		The AMT is usually triggered by a combination of disallowed deductions and exemptions, not just one, says Martin Nissenbaum, national director of personal income tax planning at Ernst and Young.
	www.usatoday.com /money/perfi/columnist/block/2003-02-24-ym_x.htm (904 words)

	alternative minimum tax (Site not responding. Last check: 2007-11-01)
		The alternative minimum tax affects a small but growing percentage of taxpayers...
		The alternative minimum tax is a large and complicated subject...
		The Alternative Minimum Tax (AMT) was passed in 1969 to ensure that upper-income...
	www.taxxhelp.com /7/alternative-minimum-tax.html (635 words)

	The Alternative Minimum Tax (Tax Guide: Personal Finance) \| SmartMoney.com
		Well, you weren't alone, and that anger led to the creation of something called the alternative minimum tax, which was designed to keep the rich from living tax-free.
		While the "regular" tax brackets, exemptions and standard deductions are adjusted annually for inflation, the AMT brackets and exemptions are not, so many people whose income has grown with the economy enter the dreaded AMT zone each year.
		After the exemption (if any) has been deducted, the result is subject to AMT rates — 26% on the first $175,000 ($87,500 for married couples filing separately) and 28% on the excess.
	www.smartmoney.com /tax/filing/index.cfm?story=amt (1297 words)

	Morningstar.com - Are You Vulnerable to the Alternative Minimum Tax?
		The AMT was originally created in 1969 to ensure that wealthy individuals who had managed to skirt taxes under the conventional tax system didn't avoid paying taxes altogether.
		But because the rules regarding AMT liability haven't been updated to the extent that the regular income-tax code has been, more and more taxpayers are apt to find themselves on the hook for AMT in the years ahead.
		Notably, the AMT and regular tax systems differ in what they consider taxable income--for example, the AMT system taxes income from private-activity bonds (municipal bonds used to fund sports arenas and the like), whereas municipal-bond income is wholly tax-exempt under the regular tax system.
	news.morningstar.com /article/pfarticle.asp?id=146256&format=pfarticle (1356 words)

	Guide to the Alternative Minimum Tax (AMT)
		What's worse, this tax is so complicated that it's often difficult to predict when it will apply.
		It's important to realize that you can end up owning assets that have an AMT basis that's different from the basis you use for regular tax purposes.
		You may be able to claim AMT credit from exercising an incentive stock option even if you haven't sold the shares.
	www.fairmark.com /amt (240 words)

	Tax Policy Center \| A Project of the Urban Institute & the Brookings Institution (Site not responding. Last check: 2007-11-01)
		The idea behind the AMT was for a taxpayer to calculate his or her income taxes twice -- once allowing for a variety of adjustments, the second time without most of them -- and pay the higher figure.
		Because the AMT negates the tax break for paying state and local taxes, District residents won't be able to take advantage of the federal deduction for paying a 9.9 percent income tax to the city.
		Americans for Tax Reform estimates that by 2010, 85 percent of homeowners with two or more children and family incomes of $75,000 or more will have to pay the AMT instead of the regular income tax because they are simultaneously losing tax breaks for their kids and their property taxes.
	www.taxpolicycenter.org /news/amt_history.cfm (2932 words)

	Alternative Minimum Tax (Site not responding. Last check: 2007-11-01)
		Before mailing your federal income tax return, check to make sure you aren’t subject to the alternative minimum tax.
		The tax law gives preferential treatment to some kinds of income and allows special deductions and credits for some kinds of expenses.
		It is a separate tax computation that, in effect, eliminates many deductions and credits and creates a tax liability for an individual who would otherwise pay little or no tax.
	www.irs.gov /newsroom/article/0,,id=107843,00.html (260 words)

	Alternative Minimum Tax Repeal: CTJ Analysis
		The corporate alternative minimum tax (AMT) was established in 1986 to try to assure that profitable corporations pay at least something in income taxes no matter how many tax breaks they otherwise take advantage of.
		The AMT did its job well for a number of years, but unfortunately, laws enacted in 1993 and 1997 have sharply weakened it.
		Repealing the corporate AMT and thus eliminating taxes on some of our wealthiest corporations would be both unfair and grossly insulting to America’s hardworking, taxpaying families.
	www.ctj.org /html/amt0901.htm (590 words)

	Panel urges ending alternative minimum tax - Personal Finance - MSNBC.com
		The consensus to repeal the alternative minimum tax means the panel must replace the $1.2 trillion that the Treasury Department expected to collect through that tax over the coming decade.
		Those affected must calculate their tax twice, under the regular tax system and then the alternative system, and pay the higher amount.
		The groups are studying ways to simplify tax laws, adjust current tax laws and replace the tax system in whole or in part.
	www.msnbc.msn.com /id/8646748 (761 words)

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