Alternative Minimum Tax (AMT)

Alternative Minimum Tax (AMT) prevents the reduction of your tax liability to zero

  • calculate if you are using tax shelters or other tax-reducing schemes
  • ensures that everyone with earned income pays some tax
  • Tax Payable = min[Tax under regular rules, Tax under minimum tax rules]
\begin{align} Tax \, Payable = min[ {Tax }_{Regular \, Rules }, \; {Tax }_{AMT \, Rules } ] \end{align}

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