When doing taxes and stuff, what does going into AMT mean?

Question

I know it stands for amount something (the other part please?) but I would also like to know what happens when you go into AMT. What does it mean?

Answer 1

The Alternative Minimum Tax was designed to have wealthy people who take all kinds of tax breaks, tax preference items; such as capital gains, high itemized deductions etc. and have income over a certain amount paid some tax. As time went by, it was not increased by inflation so currently it sometimes is applied to people who are not so wealthy, and limits some things like rental losses etc.

Answer 2

The Alternative Minimum Tax IS NOT a additional tax, it is an alternate method of computing your tax designed to prevent 'rich people' from escaping income tax by reducing or eliminating the benefits of many deductions and credits. If your entire income 'regular income' (read wages) and you do not itemize, the ATM never applies at any income level. If your income is above the cutoff level, and you claimed any deductions, credits or other tax benefits subject to the AMT, you have to complete additional forms to ADD BACK part or all of the benefit from those items.

Answer 3

it means alternative minimum tax. It's an additional higher rate tax. In theory it is to tax people who don't pay as much regular tax as they should,because of the types of deductions or types of income. Some of yournormal itemized deductions get added back. It started out to catch people who were avoiding taxes legally through loop-holes, but it's catching more and more ordinary people like you and me.
You probably don't want to go into it if you don't have to , because it's tax on top of your tax.
hope this helps.