Skip to Content

Gadling is giving away free tickets to Amsterdam!
 

Posts with tag alternative minimum tax

Alternative Minimum Tax and the "bailout bill"

Filed under: Tax

One of the many special provisions included in the bailout bill passed by U.S. lawmakers last week was a "fix" for 2008 for the Alternative Minimum Tax (AMT). This tax dates back to 1970, when a small number of high-income taxpayers were paying little to no tax because of all the deductions they had. AMT was created, and essentially it takes away some deductions for these taxpayers, uses a higher-than-normal tax rate, and results in additional tax due.

When the law was first enacted, only 19,000 taxpayers paid AMT. But the numbers in the law haven't been indexed for inflation, so without a yearly fix like lawmakers just made, a lot of middle class taxpayers could be caught by AMT and would owe a couple thousand dollars in extra income taxes.

The bailout bill specifies that the AMT exemption for 2008 will be increased around $46,000 for single taxpayers, and almost $70,000 for those filing joint. That increase means fewer Americans are subject to AMT, essentially protecting the middle class for another year.

There's pork in them thar bills! What was added to the bailout

Filed under: Debt, Simplification, Tax, Charity, Recession

pigs or porkIt seems that many of our congresscritters took advantage of the public outcry for a quick passage to pack a bunch of pork into the Emergency Economic Stabilization Act of 2008. It seems ridiculous, but members of Congress took advantage of a bill meant to save the economy to fund questionable programs in their home states. While many contend that the pork was needed to get enough votes for the bill to pass, you'd think the threat of martial law would have given senators enough reason to pass the bill without the added fat.

Taxpayers for Common Sense compiled a list of the Top 10 pieces of pork stuck into the bailout bill, the most ludicrous listed below.
  1. Tax break for manufacturers of wooden arrows used by children -- Cost $2 million
  2. 7 year tax extension for Race car Tracks -- Cost $100 million
  3. Tax incentives for film and TV production companies -- Cost $478 million
These are just a few of the crazier examples of pork attached to the bailout bill, the rest of the list encompassing billions of dollars in expenditures is sure to turn your stomach.

Not all pork has to be bad, there are many other extras added into the bailout bill which in my opinion fall under the bacon category, as in pork that tastes good!

Don't spend your tax refund just yet

Filed under: Tax

If you're one of the millions affected by the Alternative Minimum Tax (AMT) temporary fix approved by the House of Representatives last week, you may have to wait to get your refund.

The fix is good for taxpayers, but bad for the Internal Revenue Service. Any form affected by the change won't be ready until February. So for the 3 or 4 million people who usually file in January, they may not get their refunds so early.