AMT looming over many more U.S. taxpayers

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April 15, 2007|By Chicago Tribune

As last-minute filers approach Tuesday's deadline to file their tax returns, some are going to be in for a rude shock: They're going to fall into the territory of the alternative minimum tax.

The AMT was designed to ensure that high-income people paid at least some taxes, but it was not indexed to inflation, so it has ensnared an increasing number of Americans with higher tax bills.

Changes by Congress have kept a lid on that growth, but the measures are temporary: An estimated 3.5 million taxpayers are due to pay the AMT for 2006, but without changes in the law, that will explode to more than 23 million this year and more than 32 million by 2010, say experts at the Tax Policy Center.

About 3.4 percent of taxable returns in the U.S. fall into the alternative minimum tax, with about 11 percent of returns with adjusted gross income between $100,000 and $200,000 paying the AMT, and more than 56 percent of those with AGI of $200,000 or more.

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