The alternative minimum tax is the gotcha in the tax code, punishing people for having too many children or living in a high-tax state like California. Here's a new horror story. Some folks caught in the AMT unwittingly paid thousands more in total 2003 tax because they claimed legitimate deductions. "This one is really, really weird. Normally AMT just causes you to lose the benefit of your deductions, but it doesn't normally tax you more for them," says Kristin Hill, a senior tax manager in Deloitte & Touche's Washington national tax office. She calculates an AMT payer could owe as much as $5,680 in extra 2003 tax as a result of deductions on his or her regular tax. Even more folks could get hit in 2004.
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