1. Tax laws provide tax benefits for certain kinds of income and allow special deductions and credits for certain expenses. These benefits can drastically reduce some taxpayers' tax obligations. Due to a growing perception that only high-income taxpayers were enjoying these benefits, Congress created the AMT in 1969. The original targets were taxpayers who could claim enough deductions that they owed little or no income tax.

2. Because the AMT is not indexed for inflation, this alternative system has evolved into a trap for the unwary. Most disturbingly, it is hitting a growing rate of "middle class" taxpayers, including those whose Adjusted Gross Income is a modest $75,000 and above.

3. You may compute Alternative Minimum Taxable Income by starting with taxable income for regular tax purposes, plus any adjustments and preference items that apply to you.  Surprising to many, the necessary adjustments include "harmless" deductions allowed under the regular tax system, such as the standard deduction, state income and/or sales taxes, medical and dental, and miscellaneous itemized deductions.

4. You may have to pay the AMT if your re-computed taxable income is more than the AMT "exemption amount," which can be likened to the standard deduction allowed under the regular tax system. Exemption amounts are set by law for each filing status. 

5. For tax year 2009, Congress raised the AMT exemption amounts to the following levels:

• $70,950 for a married couple filing a joint return and qualifying widows and widowers;
• $46,700 for singles and heads of household;
• $35,475 for a married person filing separately.

6. The minimum AMT exemption amount for a child whose unearned income is taxed at the parents' tax rate has increased to $6,700 for 2009.

7. If you claim a regular tax deduction on your 2009 tax return for any state or local sales or excise tax on the purchase of a new motor vehicle, that tax is also allowed as a deduction for the AMT.

Taxpayers can find more information about the Alternative Minimum Tax and how it impacts them by accessing IRS Form 6251, Alternative Minimum Tax -Individuals, and its instructions at IRS.gov.