Alternative minimum tax (AMT)

The AMT is a special set of tax laws aimed at preventing the wealthy from not paying any taxes. The alternative minimum tax is imposed only to the extent it exceeds the regular income tax.┬áThe AMT calculates tax benefits allowed by the regular rules differently and applies special rates — 26% and 28% — to a larger amount of income than is hit by the regular tax. In the end, the taxpayer pays the highest of either the AMT or the regular tax bill.