Unraveling the mystery of the AMT
While completing taxes can be confusing for even the most well-organized person, trying to understand the Alternative Minimum Tax (AMT) and how it applies is perhaps one of the most confusing tax issues for the average American. Robin L. Kuleck, a certified financial planner working in Elk and Cameron counties, said the main goal of taxing people is to raise revenue to support essential government functions and can also be used to change behaviors, such as tax benefits for pursuing higher education or tax penalties for early distribution from a retirement plan. "Over time, numerous exemptions, credits and deductions made it possible for some people to pay little or no taxes at all. In 1969, Congress determined that too many high-income households were not paying their fair share by using these tax loopholes, so they created the Alternative Minimum Tax, or AMT," Kuleck said.