Alternative minimum tax
![(Top) Comparison of the regular tax on wages only (not taking into account any deductions) in 2000 and 2004 (orange and blue lines respectively) with the tentative minimum tax (AMT before deducting regular tax) (same brown line for both 2000 and 2004) for a married couple who are filing jointly. Two dashed lines show the margins between the TMT and the regular tax rates in 2000 and 2004—and how this margin was becoming narrower from year to year. This means that not many deductions are needed before the AMT must be paid. And one needs to claim fewer deductions in subsequent years in order for the parity to be reached, and thus to get into the AMT territory. (The TMT is the minimum amount of tax a person will end up paying. If it is less than the usual tax then there is no AMT.)(Bottom) The same narrowing gap between regular tax and TMT is shown in terms of effective tax rates paid on various amounts of AGI in 2000 and 2004.](/Images/godic/202412/20/AltMinTax0214.png")
The alternative minimum tax (AMT) is a supplemental income tax imposed by the United States federal government required in addition to baseline income tax for certain individuals, corporations, estates, and trusts that have exemptions or special circumstances allowing for lower payments of standard income tax. AMT is imposed at a nearly flat rate on an adjusted amount of taxable income above a certain threshold (also known as exemption). This exemption is substantially higher than the exemption from regular income tax.