WASHINGTON (WUSA) --The "rich person's" tax is about to hit a lot of middle-class Americans, if Congress does not act to stop it.
The alternative minimum tax, or AMT, was created to ensure that rich Americans paid their fair share to the tax man.The problem is that the law was never adjusted for inflation.
As time rolls by, every year that Americans make a little more money, more households become exposed to AMT, but the Fiscal Cliff could make an existing problem go from bad to worse. The latest patch to AMTexpired in 2011, sonow Congress finds another issue on its plate to debate; patching AMT again.
In 2013, it could apply to individuals making $34,000 a year and joint filers making $45,000.That's another 28 million households paying an average of $3,700 more in taxes -- just because of AMT.
Your odds of paying AMT rise if you take deductions for real estate and state income taxes -- or have a lot of kids.
Here's another way your tax bill could go up:To determine if you need to pay AMT -- you have to do your taxes twice -- calculating them under both tax scenarios.Then you pay the higher amount. Someaccountants will charge you more to do the extra calculations.