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INFLATION ADJUSTMENTS FOR 2003

September 25, 2002

Each year, Northern Illinois University Professor James C. Young beats the IRS to the punch and computes the inflation adjustments to the individual tax rates, standard deductions, personal exemptions and other items. To read them, go here.

One large area of the law that is NOT adjusted for inflation is the individual alternative minimum tax (AMT). Now, if -

• Regular tax rates and exemptions are indexed, but
  
• AMT rates and exemptions are not, and
  
• You pay the higher of AMT or regular tax,
  
• THEN inflation will cause more people to pay AMT.
  

Interesting. More on this topic next week.

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