Congress Passes Temporary Fix for the Alternative Minimum Tax
In case you haven’t heard, Congress pushed through a one year stay of execution for millions of middle class tax payers that otherwise would’ve been snagged by the Alternative Minimum Tax (AMT). Without this fix, the number of filers subject to the AMT in would’ve jumped from 4 million in 2006 to 25 million in 2007. That’s the good news. The bad news is that the fix: (1) is temporary, (2) adds roughly $50 billion to the federal deficit since it’s not being offset by increased taxes in other areas or decreased spending, and (3) will delay tax refunds for as many as 38 million filers because the action was taken so late in the year.
[Source: NY Times]
Published on December 20th, 2007 - 9 Comments
Filed under: Taxes
email this article
- add to tip'd - stumble it - digg it - bookmark it
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
Related articles...
» More AMT Insights» What is the Alternative Minimum Tax (AMT)?
» Income Tax Breaks in the Bailout Bill
» Should You Skip Your Required Minimum Distribution (RMD) in 2009?
» My First Encounter with the Alternative Minimum Tax (AMT)
» Qualifying for an ‘Economic Stimulus’ Tax Rebate Check
» Roth IRA Conversion Limits Going Away
» $15,000 Homebuyer Tax Credit Dropped from Stimulus Package
Was this article useful? Please sign up to receive our content via e-mail:
Great deals...
Readers’ choice...
Recent articles...
- Did Congress Make the Homebuyer Tax Credit Retroactive?
- Congress Extends $8000 Homebuyer Tax Credit, Adds New $6500 Credit
- Lending Club Update - October 2009 Performance
- How Much to Budget for Car Maintenance?
- Series I Savings Bonds Now Paying 3.36%
- Use Weight Loss Strategies to Get Out of Debt
- Weekly Roundup - Disney Shanghai Edition
- How to Save Money on Vacations
- Most and Least Reliable Cars - 2009 Edition
- Get 100 Free Trades from OptionsHouse Brokerage
Recent comments...
- Penny: I am about to purchase a new home.. which will be my new residence...
- APRIL DAYS: I FOR ONE HOPE THAT THE FIRST TIME HOMEOWNERS TAX CREDIT IS EXTENDED BECAUSE...
- JB: I drive a 1999 car and save $60 a month for car repairs, oil...
- Greta: My significant other and I bought a house in February 2009. My boyfriend...
- Jay: Don't forget nCleaner 2nd for turning off widows firewall and windows defender...also use the...
- Bryan: @Doug - you said it... if you simply delayed the closing, it would have...
- Sympathetic Dish TSR: @ Bonnie: Is your HD tv a Flatscreen LCD style? If so then a...
- John DeFlumeri Jr: Thanks for explaining the tax credit. Too bad for those who purchase in...
Most talked about...
- Dave Ramsey is Bad at Math
- $8,000 Homebuyer Tax Credit
- Dish Network Customer Service SUCKS
- How to Claim the First-Time Homebuyer Tax Credit
- $15,000 Homebuyer Tax Credit
- Reduced Credit Limits? Share Your Experience
- Would the "Fair Tax" Gut the Economy?
- Tax Stimulus Rebate Payments to Start Early
- Pay Off Mortgage Early? Or Invest?
- The Best Online Savings Accounts (Updated!)
- Life's Too Short to Drink Cheap Beer
- $7500 First Time Homebuyer Tax Credit
Good to know, but what is the AMT?
Comment by Steve — Dec 20th 2007 @ 3:36 pmIt’s an antiquated parallel tax system that is designed to keep the uber-wealthy from paying to little in taxes. Unfortunately, it’s not tied to the inflation rate, so more and more middle class families are being caught by it. I’ll be writing more on this topic soon, so keep an eye out.
Yes, and it hits those of us who live in high-tax states especially since for some reason AMT creators thought that only the rich take state income and property tax deductions. Also those who have lots of kids since only the uber-wealthy take exemptions for kids…
Comment by kitty — Dec 20th 2007 @ 4:52 pm::sigh:: If they would just index things like this to inflation when they start…
Comment by Ryan S. — Dec 20th 2007 @ 6:16 pmKitty: Tell me about it… We have four kids, and we’ve also experienced an uptick in income, so I’m a bit nervous. But at least we’re not in a high income tax state.
Ryan: You’re exactly right. If this was indexed to inflation, nobody would be sweating it right now (except those for whom it’s intended).
It’s so funny that so many things weren’t tied to inflation, as if that concept is so new…
Comment by jim — Dec 20th 2007 @ 7:00 pmEh, it’s better than nothing…I’ll take it.
Comment by Matthew Paulson — Dec 20th 2007 @ 8:23 pmI’m not too familiar with AMT but if everyone is saying that the problem would be fixed by having it indexed to inflation, why isn’t the fix to just add all the years of inflation from 1969 from this point forward?
Comment by MoneyNing — Dec 21st 2007 @ 1:47 pm