Register / Log In

Should I worry about AMT?


You may have heard of the "Alternative Minimum Tax" (AMT), dismissing it as only afflicting the rich. But beware, AMT (sometimes referred to as the "stealth tax" or "Alternative Minimum Torture") is a ticking time bomb.

Back in 1966, Congress noted with alarm that 155 taxpayers making over $200,000 had paid no income tax at all due to allowable, excessive deductions. So in 1969, Congress passed legislation to ensure that all high-income citizens paid at least some tax. AMT limits certain deductions above specific incomes so that any additional deductions result in no further tax reduction.

Since its original income parameters were not inflation-adjusted, AMT is beginning to affect millions of middle-income taxpayers. At an average inflation rate of 4 1/2 percent, that $200,000 income 37 years ago is equivalent to $1,019,372 today. AMT seems appropriate for such levels, but not for single taxpayers with 2003 taxable incomes as low as $40,250.

Estimates foretell a ten-fold jump in the number of taxpayers subjected to AMT between 2000 and 2010 (up from 1.3 million to 17 million)-for an average tax increase of 13 percent. The hardest hit will be those with incomes between $30,000 and $75,000 who pay heavy state taxes and have significant non-reimbursed employee business costs, such as temporary living expenses.

Accountant and lawyer groups, and the IRS's National Taxpayer Advocate, recommend its repeal. Congress came close once but was vetoed by President Clinton. With the nation's current deficit, AMT provides politically "safe" tax increases for the foreseeable future with no additional changes to tax code. While you're waiting for your W-2s to come in this month, you could help your future tax planning by urging your congressional representatives to address this issue.

In 1908, playwright Israel Zangwill referred to the United States as "the great melting pot" because of the country's international cultural diversity. Nearly 100 years later, there are still global treasures to sample in every nook and cranny of the nation, from Italian cuisine to Middle-Eastern comedy festivals. So, if you haven't made too many New Year's resolutions already, consider another: exploring diversity in your own backyard. If you're not sure where to dip in, here are several places to start.

A melting pot in its own right, the island is called home to many different races of people from all over the world, including those from Japan, Korea, China, and Thailand. The first people to actually set foot on Hawaii were Polynesians. These voyagers traveled in canoes from what historians believe was Southeast Asia in 500 A.D. and named the islands Havaiki.

From now on, some Medicare patients who undergo lung volume reduction surgery (LVRS) will receive pulmonary rehabilitation services before and after the procedure.

"You are free." Just three small words, yet so exploding with powerful emotion to me, the unsuspecting recipient in this faraway land.

Life is a continuous journey, a journey filled with guiding lights and compassionate individuals, from the young to the elderly. This statement has never rung more true than for the thousands of Tibetans-nuns, monks, families, and children-who live in exile in Dharamsala, North India.


drtp0814_Cover_120x160px.jpg
 
Stay Connected