# Alternative Minimum Tax (AMT)

*Taxes — Finicade finance glossary*

The AMT is a parallel tax calculation that disallows many deductions and preferences, with you owing whichever result is higher. It was designed for a handful of high earners paying nothing and, before indexation was fixed, drifted into the middle class. Today its main victims are people exercising incentive stock options, where the paper gain is invisible for regular tax and fully counted for AMT.

**Also known as:** AMT, alternative minimum tax

**Related terms:** [Taxable Income](https://finicade.com/glossary/taxable-income), [Itemized Deductions](https://finicade.com/glossary/itemized-deductions), [Marginal Tax Rate](https://finicade.com/glossary/marginal-tax-rate), [Incentive Stock Options](https://finicade.com/glossary/incentive-stock-options), [Tax Deduction](https://finicade.com/glossary/tax-deduction)

Source: https://finicade.com/glossary/alternative-minimum-tax