|
Middle class faces quick impact from fiscal cliff in form of alternative minimum tax
The best hope for a deal to avoid the fiscal cliff may lie with the alternative minimum tax, an obscure provision of the tax code that is about to become alarmingly relevant to millions of middle-class taxpayers.Unless Congress acts by the end of the year, more than 26 million households will for the first time face the AMT, which threatens to tack $3,700, on average, onto taxpayers bills for the current tax year. Because those people have never paid the AMT, they have no idea they are in its crosshairs put there by a broader stalemate over tax policy that has kept Congress from limiting the AMTs reach. Forget about the much-publicized tax hikes set to take effect for 2013 if you have a couple of children and annual income over $75,000, chances are good that your taxes are on track to go up substantially for 2012. Residents of high-cost urban areas, including Washington, would be hit hardest, with about 2 million households in Maryland, Virginia and the District in line to face the AMT for the first time, by official estimates. Unlike most tax increases in the fiscal cliff, including the expiration of the George W. Bush-era income tax cuts, the AMT bill would come due almost immediately. And tax experts say it would be extremely disruptive to try to fix the AMT after the 2012 tax year closes Dec. 31. Officials with the Internal Revenue Service and the Treasury Department declined to comment on the impact of adjusting the AMT after December. But congressional tax aides said the IRS has advised Congress that trying to fix the AMT after the filing season begins in January would lead to processing delays of more than two months for nearly half of all returns significantly postponing the delivery of refunds. Posted by: Au Auric 2012-11-05 |
| http://www.rantburg.com/poparticle.php?ID=355406 |