What is the Alternative Minimum Tax?

The Alternative Minimum Tax (AMT) is a tax system that some taxpayers in Arizona must use to calculate their taxes. It applies to individuals, estates, and trusts, and it eliminates many of the special deductions and adjustments that are allowed under the regular tax system. The purpose of the AMT is to ensure that higher-earning taxpayers pay a minimum amount of taxes. Instead of taking all of the deductions and adjustments allowed under the regular tax system, taxpayers must use the “Alternative Calculation” when figuring out their taxes. This calculation has its own set of rules, and it generally results in a higher tax bill than the regular tax system. Under the AMT, certain items such as state and local taxes and miscellaneous itemized deductions are not allowed. The AMT also imposes a flat tax rate on taxpayers’ income, which is 26 or 28 percent, depending on the taxpayer’s income level. So, if you are a higher-earning taxpayer in Arizona, you may end up paying the Alternative Minimum Tax. This means that you must follow the Alternative Calculation when determining how much tax you owe. This calculation generally results in a higher tax bill than the one calculated with the regular tax system.

Related FAQs

What are the penalties for not filing taxes?
What is the tax rate for inherited property?
What is the gift tax?
What is the tax rate for dividends?
What is the deadline for filing taxes?
Are business expenses tax-deductible?
How do I file my taxes?
What is the self-employment tax rate?
What is the tax rate for inheritance?
How much money can I expect to get back in a tax refund?

What is the Alternative Minimum Tax?

Related FAQs

Related Blog Posts