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| Economy |
| Middle class faces quick impact from fiscal cliff in form of alternative minimum tax |
| 2012-11-05 |
| 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 AMT’s 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 |
| #9 "It will expand to meet the space it is allowed to inhabit" I think the phrase is, "The junk you have will expand to fit the available space," Paul. |
| Posted by: Barbara 2012-11-05 23:10 |
| #8 See, the politicians and bureaucrats in the It will expand to meet the space it is allowed to inhabit, like a gas. The size of the container needs to be decreased, and the pressure needs to be brought down to safe levels. |
| Posted by: Alaska Paul 2012-11-05 20:13 |
| #7 yeah right. I'd just ask they pay what they owe, right, Charlie Rangel? |
| Posted by: Frank G 2012-11-05 19:27 |
| #6 Really, somebody should make a 50% new income tax for politicians. That would should alot of them up. |
| Posted by: Charles 2012-11-05 19:24 |
| #5 Increase tax, because state bureaucrats are much better deciding what to buy that the person who merely earned it. |
| Posted by: Bright Pebbles 2012-11-05 17:56 |
| #4 Which was originally established to keep fat cats from writing off all their income and paying no tax. Didn't feel like a "Fat Cat", Ship? |
| Posted by: Bobby 2012-11-05 17:38 |
| #3 I got burned by this SOB once. |
| Posted by: Shipman 2012-11-05 15:31 |
| #2 The AMT is covered by an inflator, on the hedonist will be affected. No wait! AMT Exemption Amounts for 2011 Legislated as part of the 2010 Tax Relief Act: $48,450 for single and head of household filers, $74,450 for married people filing jointly and for qualifying widows or widowers, and $37,225 for married people filing separately. AMT Exemption Amounts for 2012 The alternative minimum tax exemption amounts for 2012 are scheduled to revert to the following levels: $33,750 for single and head of household filers, $45,000 for married people filing jointly and for qualifying widows or widowers, and $22,500 for married people filing separately. Source: Code Section 55(d)(1). Lower exemption levels mean that more taxpayers will be subject to the alternative minimum tax calculations. AMT Tax Rates The exemption amounts mean that this amount of AMT taxable income is not subject to the AMT. Income over these amounts may be subject to AMT. Unlike the ordinary tax rates, the AMT has only two tax brackets. The AMT tax rate is assessed only on AMT income over the exemption amount. The AMT tax rates are: 26% on the first $175,000 of AMT taxable income, and 28% on the remainder of AMT taxable income |
| Posted by: Shipman 2012-11-05 15:30 |
| #1 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. Who is going to have any refunds after AMT kicks in? And WHO runs this country? The IRS or Congress? This thing is going to get ugly. |
| Posted by: Alaska Paul 2012-11-05 13:47 |