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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.

At tax time, the AMT can hurt originally appeared on BloggingStocks on Mon, 09 Apr 2007 13:28:00 EST. Please see our terms for use of feeds.

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