Alternative Minimum Tax
 

Can somebody puh-leeze explain this tax to me? When does it kick in...at what level of income? No political rhetoric please , I just want to understand this tax. The net searches just don't make sense to me.

TIA

I'm by no means an expert on this, but it seems it's more related to how many deductions you have rather than just income. If you make good money and have huge mortgage interest to deduct it may get you.

Ah, I'm on the other side. Median income and lost all of my deductions. Kids grown and gone, house paid for.

Thanks!

I don't think a big mortgage interest deduction alone will make you eligible. I had that AND wrote off $12k of my track wreck repair costs two years ago. I don't even make that much, so those deductions took my taxable income down a LOT.

I think people who write off a LOT of non-reimbursed business expenses and make serious commission checks or annuity or investment income are those who get hit the most. The tax was implemented because somewhere around 120 very wealthy people got off with no fed. income tax liability in the late 1960's. Obviously, this made the gov't. mad, so they created the AMT, thinking it would only snag those super rich who live off tax-free munic. bonds and such. They never bothered to index it, so now it's stinging people badly.

This might help: http://apps.irs.gov/app/amt2006/index.jsp?ck