The Alternative Minimum Tax and Its Impact on the Middle Class---Part 1.

The Alternative Minimum Tax (AMT) was originally designed to combat aggressive tax planning used to eliminate or substantially eliminate the taxable income of high-income taxpayers. In 2012 the number of taxpayers subject to the AMT is expected to explode by 661%, from 4.1 million in 2010 to 31.2 million. The AMT is no longer a tax imposed only on high income individuals; it has descended to the ranks of middle-income taxpayers. This article, the first in a two-part series, reviews the history of the AMT, shows how the AMT impacts middle-income taxpayers, and suggests policy changes for lawmakers. A second article will review possible planning options for advisors to help their clients avoid the AMT. [ABSTRACT FROM AUTHOR]