U.S. Personal Income Tax Planning

ALTERNATIVE MINIMUM TAX

Name of the student

Roll No

Name of the Class

Alternative Minimum Tax

The Alternative Minimum Tax is part of the Federal Income Tax in United States . The AMT can be charged to the holders of personal income tax and corporate income tax holders . Hence the AMT is applicable for individuals and corporate too . The AMT system comprises with the taxable income , larger exemption and lower tax rates rather than regular system The AMT is one type of tax other than regular tax . The present rate is

70950 for the year 2009 incase of joint holders and 46700 in case of single persons . For every year , the taxpayers should consider whether they have to pay Alternative Minimum Tax (AMT

The Alternative Minimum Tax is created in 1969 since most of the individuals not paying the taxes though they are wealthy . Such people were using the deductions that are not available to the average workers Every individual has to calculate the income tax in two different ways The first way is to calculate the tax liability under regular system which allows tax credits and certain types of expenses . Thereafter the individual has to calculate tax based on rules of alternative minimum tax . The AMT eliminates some tax deductions and credits . Out of the two ways , if AMT is found higher , then the individual has to pay additional tax besides regular income tax

In the initial stage , the AMT created meant for small number of high income taxpayers who...