Business Tax Accountant Calgary

The Alternative Minimum Tax (AMT) designated as a separate tax system was created in addition to the traditional tax, so that tax loopholes can be reduced. The law provides an alternative method of calculating the taxable income with much less deductions than they are with the traditional tax. Taxpayers are required to calculate their tax liability under both systems. If the AMT tax liability is higher than the tax liability according to the traditional system, then the higher tax amount must be paid.

The Alternative Minimum Tax applies a sliding scale with only two tax brackets. The standard amount for advertising costs and the individual deduction per dependent person are not available for the AMT, also tax payments to states, municipalities and abroad are not deductible. Unrealised gains on options must be taxed as income as shown by the Business Tax Accountant Calgary.

In contrast to the stage boundaries of the income tax, the limits for the Alternative Minimum Tax are not adjusted for inflation.