Example: A wealthy retiree who normally pays at the 35% rate might have so many deductions one year that he's caught in the AMT.
This could happen if the tax payments to Switzerland lower your regular U.S. tax bill so much that the AMT kicks in.
Before closing up shop for 2007, the House of Representatives Wednesday abandoned its strict budgetary rules, voting 352-64 to keep the AMT from rippling across America's upper-middle class.
It's hard to predict who will run afoul of AMT, since the tax is based on complex interactions of income, deductions and capital gains.
Congress likely would have passed an AMT patch anyway, so it's arguable that this element--about 9% of the entire bill--crowds out spending that could have been better used to jolt the economy back to life.
The Senate--which is not bound by the House's spending restrictions--earlier this month approved an AMT patch that adds to the federal deficit.
For most people, AMT relief would offset this, but that's a tricky point to explain.
Before year's end, they should rearrange things to get out of AMT turf.
At the top of Olson's list of concerns was perhaps the nation's most famous hidden tax--the alternative minimum tax (AMT).
The AMT was passed in 1986 as part of President Reagan's sweeping tax reform.
J. tax accountant, the AMT has snared more and more taxpayers, in part because it's not indexed for inflation as the regular tax is.
Among the largest underlying components of IYZ, in trading today American Tower Corporation ( AMT) is down about 0.2%, and Sprint Nextel Corporation ( S) is up by about 0.6%.
At a briefing Monday, Assistant Treasury Secretary for Tax Policy Pamela Olson said President George W. Bush has asked the Treasury to study the AMT problem and come up with a permanent fix to be proposed in next year's budget.
Among the largest underlying components of IYZ, in trading today American Tower Corp. ( NYSE: AMT) is off about 0.5%, Sprint Nextel Corp ( NYSE: S) is up about 2.9%, and Virgin Media Inc ( NASD: VMED) is lower by about 0.5%.
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