Why the middle class is still getting snared by the ‘wealth tax’ By Jeanne Sahadi

Why the middle class is still getting snared by the ‘wealth tax’ By Jeanne Sahadi

You may vaguely recall that in 2012 Congress “fixed” the Alternative Minimum Tax — or what the Tax Policy Center dubbed “the epitome of pointless complexity.”
But that doesn’t mean the so-called “wealth tax” was simplified or eliminated.

The AMT is still alive and complicated. What lawmakers did was permanently tie the amount of income exempted from the AMT to inflation.

Those income levels, however, are still fairly low ($52,800 for singles this year; $82,100 for married couples filing jointly).

And the set of rules that governs what can and can’t be deducted under the AMT means it’s still hitting a fair number of people for whom it was never intended — those in the middle class and upper middle class.

Figuring out whether you’re in the AMT crosshairs means calculating your tax liability twice — once under the rules of the regular income tax code, and once under the AMT rules. You must pay whichever is higher.

Read the full article at: CNN Money

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