Alternative minimum tax, or AMT, is an additional tax you pay on top of the regular income tax. Originally designed to prevent high-income individuals from using tax shelters and other gimmicks to pay less than their fair share, it now applies to millions of ordinary taxpayers. Broadly speaking they can be divided into three groups:
People with larger than average deductions for personal exemptions and/or state and local taxes. Often there is little they can do to plan around this problem.
People who exercise incentive stock options and decide to hold the shares. Planning is often crucially important for these people. (See our books Consider Your Options for people who receive options andEquity Compensation Strategies for professional advisors.)
People with some unusual item on their tax return, such as a large long-term capital gain.
More information here.