HOMEOUR PROCESSOUR TEAMJOIN OUR TEAMTOOLS CONTACT TAX READ TIME: 3 MIN Do You Owe The AMT? American educational reformer Horace Mann called education “the great equalizer.”1 In football, it’s been said that turnovers are the great equalizer. And anyone who’s ever watched CBS’s “The Amazing Race,” knows airport delays are the great equalizer in a race around the world. In taxes, there’s also an equalizer of sorts; it’s called the alternative minimum tax, or AMT. Instituted in 1969, it was intended to ensure that the very rich didn’t pay a lower effective tax rate than everyone else.2 In recent years, however, the “very rich” weren’t the only ones who needed to be concerned about the AMT. Because the AMT was not indexed for inflation until 2013, millions of middle-class Americans were being forced to pay it. Thanks to the Tax Cuts and Jobs Act of 2017, that number is falling, once again. Only 200,000 taxpayers are expected to pay the AMT in 2019.3 What Is The AMT, Exactly? It may be easiest to think of the AMT as a separate tax system with a unique set of rules for deductions, which are more restrictive than those in the traditional tax system. The only way to know for sure if you qualify for the AMT is to fill out Form 6251 from the Internal Revenue Service. It may be worth doing just to be sure, especially if you are a high income earner who can claim sizable tax breaks. Of course, under the 2017 tax law, many traditional tax breaks are limited, including personal exemptions and the state and local tax deduction. If you should have paid the AMT and the IRS discovers that you didn’t, you may owe back taxes and could also have to pay interest and/or penalties. The AMT Language Because the AMT system has complicated rules and provisions, it’s a good idea to consider consulting legal or tax professionals for specific information regarding your individual situation. And remember, the information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. If you want to avoid any potential surprises at tax time, it may make sense to know where you stand when it comes to the AMT. The time and energy you spend today may be worth the investment. Where Does All That Money Go? Here’s a breakdown of how the federal government spends its revenues. Source:Internal Revenue Service, 2019 and The Motley Fool 2019. Amount exceeds 100% due to rounding. Brainyquote.com, 2017 CNNMoney.com, January 18, 2018 Tax Foundation, 2019 The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2021 FMG Suite. Share | Related Content The Facts About Income Tax Millions faithfully file their 1040 forms each April. But some things about federal income taxes may surprise you. What If You Get Audited? The chances of an IRS audit aren't that high. And being audited does not necessarily imply that the IRS suspects wrongdoing. Home Mortgage Deduction Use this calculator to assess the potential benefits of a home mortgage deduction. 5925 Carnegie Blvd. Suite 300 Charlotte, NC 28209 Ph: 704-817-1561 teague_barry@nlgroupmail.com Have A Question About This Topic? Name Email Question Check the background of your financial professional on FINRA's BrokerCheck. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named representative, broker - dealer, state - or SEC - registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. We take protecting your data and privacy very seriously. As of January 1, 2020 the California Consumer Privacy Act (CCPA) suggests the following link as an extra measure to safeguard your data: Do not sell my personal information. Copyright 2021 FMG Suite. Securities and investment advisory services are offered through registered representatives and investment adviser representatives of Equity Services, Inc., Member FINRA/SIPC, Broker/Dealer and Registered Investment Adviser, 5925 Carnegie Blvd., Suite 300, Charlotte, NC 28209 (704) 554-6404 The Teague Group and all other entities and individuals referenced are independent of Equity Services, Inc. unless otherwise noted. Barry Teague offers securities in CA, GA, NC, SC, VA. Contact The Teague Group Office: (704) 817-1560 Fax: (704) 554-6536 5925 Carnegie Blvd. Suite 300 Charlotte, NC 28209 teague_barry@nlgroupmail.com Quick Links Retirement Estate Insurance Tax Lifestyle All Articles All Videos All Calculators All Presentations