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Why would I have to worry about AMT if my tax liability is covered through withholding from my paycheck?
Because your employer only witholds what you instruct them to. That may be nowhere near your liability. Does your employer know about all of your profitable tax trades, your home "flipping" profits etc? Really, they are only going to withhold what you tell them.

Last year I had my wife change her withholding to basically 0. My tax payments thru the year were sufficient to cover our liability (and more).

The boss could care less. They just need to make sure to make those payments.....

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