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AMT

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The Alternative Minimum Tax, or AMT, is a tax intended to elicit a minimum contribution from individuals and corporations claiming exemptions that are disproportionate to their income or profits. Although the AMT was originally designed in 1970 to target a select a few hundred wealthy individuals that were paying little to no tax by claiming arcane exemptions, the AMT now affects millions of upper-income and middle-income individuals and families claiming relatively legitimate exemptions. As of 2010, the AMT remains a perennial subject of debate in Congress, which is politically motivated to issue frequent "patches" to decelerate the descent of the AMT deeper into the lower tax brackets. Calculating whether an individual owes the AMT - and how much - is complex. To help offset this complexity, the Internal Revenue Service (IRS) created the "Alternative Minimum Tax Assistant," an online wizard that guides taxpayers towards determining whether they might owe the AMT. If the AMT Assistant tests positive, the taxpayer is instructed to fill out Form 6251, which gives a definitive answer as to whether the AMT is owed and how much. Corporations possibly subject to the AMT are instructed to fill out Form 4626.



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