Concept
The AMT Rate is a part of the Alternative Minimum Tax system, designed to ensure that taxpayers with certain levels of income pay a minimum amount of tax even if they have numerous deductions and credits. It operates parallel to the regular tax system, requiring taxpayers to calculate their tax liability under both systems and pay the higher amount.
Relevant Degrees
Concept
The Alternative Minimum Tax (AMT) is a parallel tax system designed to ensure that high-income individuals and corporations pay a minimum level of tax, regardless of deductions and credits that might otherwise significantly reduce their tax liability. It operates by adding back certain tax preference items to taxable income and applying a separate AMT rate, potentially resulting in a higher tax bill than under the regular tax system.
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