AOL Money & Finance

At tax time, the AMT can hurt

More

With the 2006 tax year filing deadline coming in a little over a week from now, have you done yours yet? This is the question I've been asked dozens of times in the last week, as taxes provide more water-cooler talk in the first few weeks of April than the final four of the NCAA tournament. The culprit? Anxiety would be my guess.

Anyway, the now-outmoded alternative minimum tax (AMT), created as a roadblock to tax avoidance by the affluent, is now trickling down to the middle class (and has been for years now). The AMT is a tax structure that disallows personal exemptions, the standard deduction or a host of other tax breaks that middle-income families enjoy under the regular tax code. For many single-earner or double-earner families, those exemptions and deductions can mean thousands of dollars in tax differences. These are no small potatoes to families that even make six figure incomes but have a huge tax burden due to the AMT.

Is it time to banish the AMT or re-structure it for current economic circumstances? This is being discussed in many circles, even in Congress. If the AMT is re-structured, which class of wage earners would it effect most? With the AMT tax affecting non-tax-avoiding citizens who just happen to live in states with higher state and local taxes, time has come for a change. Or (jokingly), states with higher state and local taxes could face a mass exodus of taxpayers to other states. Maybe another real estate bubble is on the horizon. Alright, enough joking. The AMT is all too serious.

Add your comments

Please keep your comments relevant to this blog entry. Email addresses are never displayed, but they are required to confirm your comments.

When you enter your name and email address, you'll be sent a link to confirm your comment, and a password. To leave another comment, just use that password.

To create a live link, simply type the URL (including http://) or email address and we will make it a live link for you. You can put up to 3 URLs in your comments. Line breaks and paragraphs are automatically converted — no need to use <p> or <br /> tags.

Symbol Lookup
IndexesChangePrice
DJIA+30.6910,464.40
NASDAQ+6.872,176.05
S&P 500+4.981,110.63

Last updated: November 26, 2009: 01:46 PM

BloggingStocks Exclusives

Hot Stocks

DailyFinance Headlines

Latest from BloggingBuyouts

TheFlyOnTheWall.com Headlines

BioHealth Investor Headlines

WalletPop Headlines

My Portfolios

Track your stocks here!

Find out why more people track their portfolios on AOL Money & Finance then anywhere else.

BloggingStocks Partners

More from AOL Money & Finance

WalletPop Headlines