Tag: alternative minimum tax
We are now solidly into 2014, so it’s time to start thinking about your 2013 tax bill. One big question to be answered is whether you will owe the dreaded alternative minimum tax with your 2013 Form 1040. Congress originally cooked up the alternative minimum tax (AMT) to make sure high-income types who take advantage of multiple tax breaks would still owe something to Uncle Sam each year. These days, however, upper-middle-income folks are the most likely AMT victims. Here’s what you need to know.
Think of the AMT as a separate tax system with a family resemblance to the more-familiar “regular” federal income tax system. The difference is the AMT system taxescertain types of income that are tax-free under the regular tax system and disallows some regular tax deductions. Also, the maximum AMT rate is “only” 28%
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