AMT

AMT, or Alternative Minimum Tax, is a parallel tax system designed to ensure that individuals and corporations pay a minimum amount of tax, regardless of deductions and credits. It primarily targets higher-income earners who might otherwise reduce their tax liability significantly. Under AMT, taxpayers calculate their taxes twice: once under regular tax rules and again under AMT rules, which limit some deductions. The taxpayer then pays the higher amount. This system was introduced to prevent wealthier individuals from avoiding taxes entirely through loopholes, ensuring a fairer tax contribution from those with greater financial capacity.