Millions More MAY Pay AMT for 2006

Millions More MAY Pay AMT for 2006

Mon Dec 26,11:59 AM ET



NEW YORK -

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Congress is expected to recess for the holidays without an agreement on how to limit the effect of the AMT for 2006. While the AMT is expected to affect about 4 million taxpayers for 2005, that number will swell to about 21.6 million for 2006 unless Congress acts to lessen the impact.

Congress has said it will do so next year, making it retroactive to Jan. 1, but it's still unclear exactly how that will play out, since other initiatives, like extending cuts on capital gains and dividends, loom in the background.

"Congress can address that dilemma, or growing probability of AMT exposure, by passing legislation that retroactively reduces that bite, and it would probably be as simple as maintaining or increasing the exemption amount," says John Nersesian, wealth-management strategist at Nuveen Investments.

"The exemption is used to ensure that moderate-income taxpayers do not fall victim to the tax."

In the current tax year, married couples filing jointly with income above $58,000 may be subject to AMT, though that figure, or exemption, is dropping to $45,000 next year unless new legislation is passed. The exemption is phased out for those with higher incomes, or $150,000 for married couples filing jointly.

more...
http://news.yahoo.com/s/ap/20051226/ap_on_bi_ge/managing_money_amt_7

increase the taxes on the poor and middle class