Tax practitioners may increasingly find themselves doing two sets of calculations in the coming years as the Alternative Minimum Tax spreads into the ranks of middle-income taxpayers. The AMT is rapidly becoming a “cash cow,” leaving Congress slow to act to fix the problem caused by a lack of inflation adjustments to the AMT. In the 1990s, only 600,000 taxpayers were affected by the AMT; in the 2004 tax year the Treasury Department expects more than 3 million taxpayers to file using AMT. Last year, the AMT brought in $11 billion on 2 million returns. And, to further complicate matters, where you live could make the AMT either go away or worsen, notes Linda Fitz of Kochis, Fitz, Tracy, Fitzhugh & Gott, Inc. of San Francisco.
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This story is from the CCH’s monthly Focus on Tax newsletter, which provides advise and guidance on federal and state tax issues for tax and accounting professionals.
Read this article from CCH’s Journal of Taxation of Financial Products.