alternative minimum tax

noun

Definition of alternative minimum tax

: a U.S. federal income tax that was originally imposed to prevent wealthy taxpayers from using tax shelters to avoid paying taxes, that excludes many deductions and exemptions allowed in computing regular tax liability, and that must be paid instead of the regular tax liability by individuals and businesses whose alternative minimum tax liability is greater than their regular tax liability

Examples of alternative minimum tax in a Sentence

Recent Examples on the Web Trump was periodically required to pay a parallel income tax called the alternative minimum tax, created as a tripwire to prevent wealthy people from using huge deductions, including business losses, to entirely wipe out their tax liabilities. Russ Buettner, Star Tribune, "Trump's taxes show chronic losses and years of income tax avoidance," 27 Sep. 2020 The dreaded alternative minimum tax would let his business losses erase only some of his liability. Russ Buettner, Susanne Craig And Mike Mcintire, New York Times, "Long-Concealed Records Show Trump’s Chronic Losses and Years of Tax Avoidance," 27 Sep. 2020 Bill Clinton campaigned on a middle-class tax cut and then raised income taxes, Medicare taxes, corporate taxes, the gasoline tax, Social Security benefits taxes, and the alternative minimum tax, and limited the use of itemized deductions. Jim Geraghty, National Review, "The Consequences of Biden," 18 Sep. 2020 Many people who lost the deduction for state and local taxes got net tax cuts because of a combination of lower tax rates, the higher standard deduction, larger child tax credit and the narrower alternative minimum tax. Richard Rubin, WSJ, "Democrats and Affluent Suburbs Join to Fight Tax-Break Cap," 25 June 2019 So too was the alternative minimum tax passed in 1969 to capture taxes from those very few wealthy taxpayers (155 to be precise) who had paid no income tax due to deductions and tax benefits. Dp Opinion, The Denver Post, "Letters: Drilling into “Medicare for All” (11/7/19)," 7 Nov. 2019 Look at the alternative minimum tax (AMT), initially 10%, which went into effect in 1970, intended to... WSJ, "Can We Afford Sen. Warren’s Wealth Tax?," 10 Feb. 2019 De Blasio will also propose that the corporate alternative minimum tax be re-instituted. Zak Hudak, CBS News, "De Blasio to unveil "most aggressive wealth tax" during debate," 31 July 2019 Her lower federal tax for 2018 resulted from the changes in the new tax law because more of her income was taxed at lower tax rates and the alternative minimum tax was eliminated. Ray Martin, CBS News, "IRS to taxpayers: Check your tax withholding now," 28 June 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'alternative minimum tax.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of alternative minimum tax

1958, in the meaning defined above

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The first known use of alternative minimum tax was in 1958

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Last Updated

3 Oct 2020

Cite this Entry

“Alternative minimum tax.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/alternative%20minimum%20tax. Accessed 22 Oct. 2020.

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More Definitions for alternative minimum tax

alternative minimum tax

noun

Legal Definition of alternative minimum tax

: a federal tax that prevents a person or entity (as a corporation) with taxable income from avoiding tax liability and that imposes tax liability in the amount of the excess of the tentative minimum tax over regular tax liability — see also tax preference item

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