Congress is up to its annual procrastinating self as usual when it comes to dealing with the Alternative Minimum Tax (AMT). Each year for about the last five years it decides in late November or December whether to increase the AMT exemption or let it revert back to the exemption amount that was in place in 2001.
In 2009 the AMT exemption was $70,950, without Congressional action the exemption amount will be reduced to $45,000 for 2010. If the AMT exemption is not increased for 2010 millions of taxpayers will not only have the pleasure of calculating their tax return twice, once under Federal rules and a second time under AMT rules, but they will also see an average increase in their Federal taxes of around $3,900 each.
Kelly Phillips Erb wrote a good article titled “AMT Relief in the Works, Says Congress” on the history of AMT and why Congress will never repeal this tax. To access the article click the following link AMT Relief in the Works, Says Congress, or you can access the article at www.walletpop.com.
This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.
