Money: Taxed by Surprise

The AMT is socking the middle class. How you can try to avoid the blow

Tucked inside the 2005 budget from the Bush Administration is a proposal that may prompt you to sigh with relief if you have feared being hit with the alternative minimum tax (AMT). It's a patch--not a full-strength remedy--for a complicated tax that was designed to prevent the wealthy from avoiding taxes but is increasingly hitting the wallets of middle-class taxpayers.

According to current law, taxpayers must calculate their taxes two ways--under the regular federal income-tax schedule and under the alternative-tax scheme--and pay the higher of the two. About 2.4 million taxpayers will be subject to the AMT this year, says...

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