How do the Bush Tax Cuts and the Alternate Minimum Tax (AMT) relate?
First a quick understanding of how the system works. You pay the alternative minimum tax only to the extent it exceeds your regular tax. With that in mind, it makes sense that if you pay A LOT of regular tax, the “deduction disallowance” factor which puts most people in AMT doesn’t affect those who are already paying a huge amount of regular tax. If you consider “wealthy” to be those making over say $400K, the AMT does not generally affect them. At that level of income, most taxpayers have no personal exemptions (an AMT adjustment), they get phased-out on their itemized deductions (also an AMT adjustment) and as a result have a higher regular tax liability. It is because they pay so much REGULAR tax that they owe no AMT. Pick your poison, pay a lot of regular tax or a lot of AMT. (Neither sound particularly exciting to me.) But “wealthy” people making between say $100K and $400K are likely candidates for AMT, especially because of the Bush tax cuts. Their regular tax liabilities went d
