Alternative minimum tax: This is an arcane tax created decades ago to capture rich tax avoiders, but it now ensnares some middle-income families because it was never adjusted for inflation.
Basically, taxpayers figure their liability under the regular income tax and AMT, and pay the higher of the two. The AMT doesn't allow a deduction for state and local income taxes, which is why residents in high-tax states like Maryland tend to trigger the AMT.
For years, Congress made temporary fixes to prevent millions of taxpayers from owing the AMT, but the last patch expired in 2011. Without congressional action, many Marylanders would have come to know the AMT because the exemption would have reverted to older, much lower levels.
"It would have been impossible to escape" for most state residents, said Michael Kitces, director of research for Pinnacle Advisory Group in Columbia.
But under the new law, Congress passed permanent relief by raising the amount of income exempted from the AMT and indexed it for inflation. For tax year 2012, the exemption amount is $50,600 for singles and $78,750 for joint filers.
"That will affect a lot of people in the $150,000 to $300,000 range," Benson said. "They are the people who would have been very hard by the AMT if that hadn't been fixed."
Estate tax: Last year, a person could shelter $5.12 million from federal estate taxes, which are paid when a deceased person's assets are transferred to someone else, and any money above that was taxed at 35 percent.
But the amount an individual could shelter from the tax was set to drop to $1 million this year, and the excess could be taxed at a top rate of 55 percent.
Fearing the worst, Maryland lawyers worked frantically to help clients set aside millions of dollars in trusts for heirs before the law changed. As it turns out, Congress maintained the 2012 limit and indexed it for inflation — a more generous tax break than many expected. The maximum tax rate on larger estates, though, was bumped up to 40 percent.
"I haven't had any clients call me up with buyer's remorse," said Jeffrey Gonya, an estate planning lawyer in Baltimore who was among those trying to beat the year-end deadline. "It's still a good thing to do."
Taxes are just one part of the fiscal cliff. Congress delayed the automatic spending cuts for two months — which also will affect many Marylanders who make their livelihood from the government.
Having watched Congress in action, Rockville financial planner Christopher Brown said it's made him consider investing in the Congressional Effect Fund.
"The theory is that Congress creates uncertainty," which is bad for stocks, Brown said. So when Congress is in session, the fund invests in government securities, and switches to an S&P 500 index stock fund when lawmakers are in recess, he said.
"It's done pretty well," Brown said.