The Alternative Minimum Tax (AMT) was designed by the United States government as a way of ensuring that high-earning individuals and corporations do not avoid paying tax due to the numerous deductions and exemptions that are available each year. However, because of factors like inflation, an increasing number of individuals may fall above the income threshold at which the AMT kicks in.
[1][2] Individuals are required to pay whichever is higher—the regular tax or the AMT. Careful financial planning throughout each tax year, taking into account common tax factors such as investments, home expenses, and deductions, can help you reduce your AMT liability or avoid it altogether.
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