Many think of the Alternative Minimum Tax as something only rich people pay. But even with tax reform having reduced its bite, the AMT still affects many upper-middle income taxpayers.
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, talks about the AMT and how it's a completely separate tax system that can add thousands to your tax bill. Because it uses different deductions and exemptions, the AMT can lead to higher taxes in some cases, especially for those who live in states with high state and local tax burdens. Dan notes that higher AMT exemptions and higher ordinary tax rates should make fewer people subject to AMT, but with almost 4 million taxpayers paying an average of $6,600, it's worth looking at the AMT and considering any measures available to reduce its impact.
Take advantage of this little-known tax "loophole"
Recent tax increases have affected nearly every American taxpayer. But with the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill. In our brand-new special report "The IRS Is Daring You to Make This Investment Now!," you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.