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The term Alternative Minimum Tax (AMT) is sometimes, used for the business assessee. It gets triggered when the taxpayer makes use of more exemptions.
It is used to get a fair share of taxes from the higher-income groups where rates are straightforward depending on the income.
The exemption can be much larger than standard but it may start to disappear once you reach the phase-out, which indicates a decline in the tax credit as the income approaches the qualifying limit for the credit.
Once the earnings hit the level, exemptions up to 25 cents of every dollar start to disappear.
One can use online platforms or tools like platforms, to determine who is eligible for the specific tax credit.
If the earnings exceed the limit, they may no more be eligible for credit. For example –
For dependents (or child), it declines but for married couples before the final submission for the tax year, if either of the spouses was covered by a retirement plan, the deductions will diminish depending on the joint-filing status.
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