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2012 Taxes- Filing could be delayed, Increased taxes due to AMT for 2012

We have been advising our clients that one of the most significant tax increases for individuals that may occur for 2012, not 2013, is the reduced Alternative Mininum Tax Exemption. Time is running out for Congress to act on this.

The “AMT Patch” will subject many taxpayers to taxes for 2012 and may delay tax filings until late March unless Congress acts by the end of 2012.
This affects 2012 returns.

If you itemize deductions, you will be affected by the delayed tax filings and could face additional taxes due to the AMT.
The AMT is a “flat tax” on income, without the benefit of many deductions including state and local taxes commonly deducted on Schedule A as itemized deductions.

IRS Acting Commissioner Steven T. Miller warned Congress on Wednesday that if lawmakers fail to extend the traditional alternative minimum tax patch, up to 100 million American taxpayers could be affected, and most taxpayers might not be able to file their tax returns until late March 2013 or later.
The following is taken from today’s Wall Street Journal:

• The warning was more ominous than in a previous letter, in which Mr. Miller said that some 60 million taxpayers might be prevented from filing tax returns while the IRS reprogrammed its computers. Now, Mr. Miller is forecasting that “it is becoming apparent that an even larger number of taxpayers — 80 to 100 million of the 150 million total returns expected to be filed — may be unable to file.”
The issue is that the IRS needs time to program its computer systems to reflect tax law changes. If Congress fails to reach a deal in the next 12 days, the IRS would need to change its computer systems to reflect the expiration of the patch. Because of the time and effort involved, “most taxpayers may not be able to file their 2012 tax returns until late in March of 2013, or even later,” Mr. Miller wrote.
We have attached the letter from the IRS Commissioner on this matter.

I urge you to express your concern with our Representatives and Senators this week on this matter.

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