from
(snip)""I love to describe the AMT as one of those big roulette-type wheels that goes round and round, and where it stops nobody knows," said Pete Lang, president of Lang Capital LLC, a Hilton Head, S.C.–based private wealth manager.
This may come as a surprise, but it's not the rich who have the most to worry about. Some 3.9 million taxpayers—4.2 percent of the nation's total—are expected to get hit with the AMT for 2013, according to experts from the Tax Policy Center. The average tab for individuals: $6,600.
"Unfortunately, AMT is really targeted at the middle market," said Dave McKelvey, partner in Friedman LLP, a New York City accounting and advising firm. "If you make a lot of money, your regular tax is going to be high enough that AMT is not going to be an issue, and if you make an income that's low enough, AMT is not going to be an issue." (snip)
(snip)So how do you know if you'll face AMT this year? Past experience may be a better guide this January than it's been in the past.
That's because the compromise that ended the "fiscal cliff" showdown early in 2013 ended the annual uncertainty about the income levels exempt from AMT. Now the thresholds are automatically adjusted each year for inflation. The full exemption applies to an adjusted gross income of $80,800 for a couple filing a joint return, $51,900 for singles. The exemption phases out as income rises.
"We shouldn't have the threat of huge numbers of additional people being caught by the AMT going forward," said Mark Luscombe, principal federal tax analyst for CCH, a Wolters Kluwer business that studies tax issues.
The fiscal cliff deal also raised tax rates for higher-income earners. Couples making more than $450,000 a year and singles earning $400,000 or more now face a "marginal rate" of 39.6 percent rather than 35 percent on income above those levels. Because the maximum AMT rate is 28 percent, these well-to-do taxpayers will typically be charged more on their regular returns so they won't face the AMT.
Taxpayers with small incomes fall within the AMT exemption limits. That leaves the upper middle class to face the tax, especially those with incomes between $200,000 and $500,000, Luscombe said.
Certain factors raise the AMT risk. The seven triggers are:
1. living where there are high state and local taxes, which produce big deductions on the regular return
2. exercising stock options
3. reporting large investment options
4. having lots of children
5. using a home-equity loan for something other than home improvement
6. having a pile of miscellaneous deductions
7. claiming business depreciation
(snip)
Potential take-aways from this article are that single persons earning $52,000 or more are potentially subject to having to pay higher taxes based on the Alternative Minimum Tax. The odds of AMT forcing the payment of higher taxes is directly related to the number of deductions and exemptions taken in regard to 'regular' taxes. This puts people living in high tax rate states at greater risk of being hit by the AMT, since state ( and local ) taxes paid serve as deductions against federal taxable income.
Thus the AMT may not only reduce the after-tax dollars left in the pockets of higher earning dancers and camgirls, but it may also reduce the after-tax dollars left in the pockets of their customers.
At the very least, the AMT provides reason for higher earning dancers and camgirls to utilize tax prep software which runs the AMT calculations along with the 'standard' tax calculations.



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