Definition:
A tax provision designed especially to prevent wealthy filers from exploiting so many loopholes and tax breaks that their regular tax bill is effectively next to nothing. Certain benefits allowed by the regular rules are ignored, and special rates of 26-28% are levied on a larger share of income than would be subject to normal taxes. Line 43 on Form 1040 can determine whether or not someone will be subjected to the AMT. If required to file the AMT, you must complete Form 6251, Alternative Minimum Tax/Individuals.
