Posted Nov 05, 2012 10:10 pm CST
It’s getting down to the wire for Congress to approve the inflation “patch” needed to prevent some 26 million Americans from being hit for the first time with the alternative minimum tax.
Traditionally, the AMT affects 4 or 5 million taxpayers with incomes of $200,000 to $1 million. But unless gridlocked lawmakers work together to approve the inflation fix by the end of 2012, a total of 31 million taxpayers will have to pay the AMT for 2012. Married couples with children earning $75,000 or more can expect to be hit with an average income tax bill increase of $3,700 or so, the Washington Post reports.
If affected taxpayers are really unlucky, they could also be required to pay penalties for underwithholding of tax due, said tax expert Leonard Burman of Syracuse University. “But politically, it’s inconceivable that Congress would let that happen.” He calls the impasse among lawmakers about approving the patch “a dangerous game of chicken.”
A chart provided by the Washington Post shows income levels at which taxpayers are likely to be affected by the AMT, absent action by Congress, and the amounts they likely will have to pay.