Who pays the AMT? Q.Who pays the AMT? A.Before the 2017 Tax Cuts and Jobs Act (TCJA), the individual alternative minimum tax (AMT) primarily affected well-off households, but not those with the very highest incomes. It was also more likely to hit taxpayers with large families, those who were married, and those who lived in high-tax states. TCJA shields almost all upper-middle and high-income taxpayers from the reach of the AMT. The AMT is now most likely to hit those at the top of the income scale who are engaged in certain sheltering activities. Read more about Who pays the AMT?
What is the AMT? Q.What is the AMT? A. The individual alternative minimum tax (AMT) operates alongside the regular income tax. It requires some taxpayers to calculate their liability twice—once under the rules for the regular income tax and once under the AMT rules—and then pay the higher amount. Originally intended to prevent perceived abuses by a handful of the very rich, the AMT affected roughly 5 million filers in 2017. The Tax Cuts and Jobs Act dramatically reduced the reach of the AMT, albeit temporarily, so that the tax will hit only 200,000 filers in 2018. Read more about What is the AMT?
Why are taxes so complicated? Q.Why are taxes so complicated? A.Our tax system could be simple if its only purpose were to raise revenue. But it has other goals, including fairness, efficiency, and enforceability. And Congress has used the tax system to influence social policy as well as to deliver benefits for specific groups and industries. Read more about Why are taxes so complicated?
