PDA

View Full Version : Alternative minimum tax



UltraJet
11-26-2007, 09:17 PM
Anybody here have any thoughts on the lack of a patch for 2007? I've been doing the calculations and I will owe an additional 5K at least if this thing isn't patched.:jawdrop: Can't believe this isn't getting more airtime. People are not going to know what hit 'em come April if this thing isn't patched in the next 4 weeks. The latest a patch has been implemented, prior to this year, is May. Then again the Dems are in control now. Any tax pro's out there have any predictions???

Trailer Park Casanova
11-27-2007, 03:37 AM
We got stung by it too. Cost us 12g's.
It will raise $1 trillion in tax revenue over the next decade so congress is reluctant to end, correct or adjust it.
Raising it is being kicked around in the senate and house.
It's now become another marriage penalty tax.
At least in our case and as far as we're concerned it has.

INSman
11-27-2007, 04:25 AM
Anybody here have any thoughts on the lack of a patch for 2007? I've been doing the calculations and I will owe an additional 5K at least if this thing isn't patched.:jawdrop: Can't believe this isn't getting more airtime. People are not going to know what hit 'em come April if this thing isn't patched in the next 4 weeks. The latest a patch has been implemented, prior to this year, is May. Then again the Dems are in control now. Any tax pro's out there have any predictions???
I get hammered on this bullshit as well, what was the last patch in May ??

UltraJet
11-27-2007, 11:35 AM
They raised the exemption in May 2006 to $62,500(I believe) for married couples up from $58,000 the previous year. If they do not patch it by the end of the year it will revert to pre-2001 exemption of $45,000 for married couples. Therefore common math says that if you were on the border last year of paying it, you will owe 26% of 18K this year. Anybody on these forums making $100,000+, has a decent size home, pays property taxes, state taxes, and has kids will undoubtedly get hammered this April by this "stealth" tax. I assume this is alot of people on here. Republicans have always patched it by increasing the exemption year after year and increasing the deficit to pay for it. The democrats want a way to pay for it(ie. increase taxes on the extreme wealthy), hence the reason that jack $hit is being done about it.:mad:
It pisses me off that they want to collect a tax from people the law was never intended to hit. The law was enacted in 1969 to force about 200 people in this country who were not paying taxes to pay something. It was never adjusted for inflation and hence if you make $100,000+(without a patch in place) you are considered extremely weatlhy enough to pay it.:idea:

lalhc
11-27-2007, 11:53 AM
That damn alternative minimum tax nails me every year. I've been a 1099 employee the past two years which has helped a little.

It's Only Money
11-27-2007, 11:54 AM
The AMT (Alternative Minimum Tax) was originally legislated to prevent high income taxpayers from completely avoiding Federal Income Tax. Initially it was a flat 10% when it was enacted in 1969 by the Nixon Administration. It was raised by the administrations (with the help of congress) of Carter, Reagan, Bush I and Clinton.
It is a boon to the government and a bane to the middle class.

UltraJet
11-27-2007, 12:13 PM
We got stung by it too. Cost us 12g's.
It will raise $1 trillion in tax revenue over the next decade so congress is reluctant to end, correct or adjust it.
Raising it is being kicked around in the senate and house.
It's now become another marriage penalty tax.
At least in our case and as far as we're concerned it has.
This is true. The problem is they counted on this money for future budgeting when they shouldn't have. It is a tax they should of never intended to collect. This is how the republicans have seen it, hence just patching it to affect the middle class less year after year and adding it to the deficit. Democrats, however, want to raise taxes elsewhere to pay for these patches. This is bull$hit! They shouldn't be counting on this money! I still have hope they'll patch this thing by year's end but something will have to give and not too sure who it will be. The interesting thing is the taxpayers most affected by this are in blue, democrat, states(ie. CA, MA, NY). So one would think the dems would want to see this thing through, but their "paygo" policy is going to screw us! We are already past the 11/16 deadline for the IRS to issue proper paperwork for this coming tax year.

ChumpChange
12-17-2007, 08:28 AM
Update
http://money.cnn.com/2007/12/13/pf/taxes/amt_house_patch2/index.htm
NEW YORK (CNNMoney.com) -- By the end of next week 21 million taxpayers will probably receive the protection they've been promised from the Alternative Minimum Tax (AMT). But the fix likely won't account for an estimated $50 billion in lost tax revenue.
The House on Wednesday passed a revised bill calling for a one-year "fix" to the Alternative Minimum Tax (AMT) that would be fully paid for by imposing new taxes and penalties, primarily on businesses.
The move is likely to be rejected by the Senate, which last week passed its own AMT fix with no funding, a stance that Republicans and the White House have insisted on repeatedly.
And ultimately, say Washington analysts, the House will have to give in.
"The ultimate outcome on AMT will be a one-year patch that is passed with no offsets," said Anne Mathias, policy director of research for the Stanford Group, a policy research firm. "The House does not want to do it that way, but the reality is that the Senate cannot do it any other way."
Clint Stretch, managing principal of tax policy at Deloitte Tax LLP, agrees. "[The Senate] most likely will send the House the clean (un-offset) bill as a last minute take-it-or-leave-it proposition. The betting is the House takes it."
For now, though, the House Democrats are not yielding. "With passage of this bill, we're giving the Senate Republicans another opportunity to be responsible and hopefully this time they will do the right thing and support this critical relief," said House Ways and Means Chairman Charles Rangel, D-N.Y., in a statement.
The ongoing feud between Democrats and Republicans on the pay-for issue has postponed passage of the AMT patch throughout the year. That postponement will now delay the beginning of tax-filing season and refunds.
Everyone agrees that in its current form the AMT is ill-conceived. Since the AMT's inception nearly 40 years ago, the amount of income you're allowed to exempt from AMT consideration has never been adjusted for inflation.
It was meant to catch wealthy tax filers who otherwise would not have paid much under the regular income tax code. But because average income has outpaced inflation over time, more and more people start to look like the rich guys when doing their AMT calculations.
Since 2001, Congress has temporarily increased income exemption levels. The last "patch" - for 2006 - put the exemption levels at $62,550 for joint filers and $42,250 for single filers. The bill passed by the House calls for an increase in those levels to $66,250 and $44,350, respectively. Without a patch, the 2007 exemption amounts will fall to $45,000 for joint filers and $33,750 for single filers.
Democrats and Republicans both make impassioned speeches about the need to adjust those income exemption levels and allow for a number of tax breaks that are disallowed under the AMT.
But the AMT raises a lot of tax revenue every year. And lawmakers part ways on what to do if that money isn't coming in.
Republicans have said they oppose raising other taxes to pay for temporary AMT relief for two reasons:
The revenue was never intended to be raised in the first place since the tax wasn't intended to hit middle class taxpayers; and
The offsets proposed are often permanent in nature, while AMT relief is temporary, at least when done on a year-by-year basis. People on both sides of the aisle, however, have called for permanent repeal of the tax as well.
Democrats and deficit watchdogs on both sides of the aisle contend that AMT relief should be paid for because the cost of borrowing the money raises the long-term cost of the patch and increases the country's deficit.
"If the nation doesn't pay for extending AMT relief now, it will have to later, through tax increases, spending cuts, or both, that are likely to affect millions of ordinary working families," accordiing to a statement from the liberal Center on Budget and Policy Priorities.
Federal budget estimates are based on assumptions that there would be no AMT relief and that the $50 billion from 2007 tax returns would be flowing into government coffers.

ULTRA26 # 1
12-17-2007, 08:33 AM
I have paid AMT for the last 4 years. Enough already!

058
12-17-2007, 09:52 AM
I have paid AMT for the last 4 years. Enough already!Whadda mean "enough already"? As a liberal you should be honored and privledged to pay taxes no matter how much they are. 'Com on now, practice what you preach.:D

Big Warlock
12-17-2007, 09:59 AM
I have paid AMT for the last 4 years. Enough already!
Sorry bro, I have to agree with 058!!!
You don't want to see my tax bill!!! :mad:

Trailer Park Casanova
12-17-2007, 10:32 AM
I believe congress will be voting on the patch this week.
If not, grab your wallet.