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Posts with tag amt

Don't spend your tax refund just yet

by Tracy Coenen Dec 27th 2007

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.

Tags: alternative minimum tax, AlternativeMinimumTax, amt, income taxes, IncomeTaxes, internal revenue service, InternalRevenueService, irs, tax, tax refund, taxes, TaxRefund

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The AMT smack-down held off for one more year

by Tracy Coenen Dec 20th 2007

Filed under: Tax

About 20 million taxpayers were spared from being hit with the Alternative Minimum Tax (AMT), thanks to a bill finally passed by the House of Representatives.

The AMT is a provision in the tax law which ensures that taxpayers with "high" income and a lot of deductions pay at least a minimum amount of taxes. But the rules were written back 1969, when the definition of "high" income was a bit different than it is today.

According to the New York Times, $150,000 in income in 1969 would be equivalent to $850,000 in today's dollars. Clearly, what was considered wealthy in 1969 is quite different by today's standards.

The tax law hasn't kept pace with inflation, and this year couples with income of $45,000 would have been affected by AMT. This new bill ups that figure to $66,250 for married taxpayers. It's estimated that this development will keep a married couple from paying an additional $4,000 to $5,000 in tax for the 2007 tax year.

Forensic accountant Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations through her company, Sequence Inc. Forensic Accounting. The Association of Certified Fraud Examiners honored Tracy as the 2007 winner of the prestigious Hubbard Award and her first book, Essentials of Corporate Fraud, will be on bookshelves in March 2008.

Tags: AMT, taxes

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The Alternative Minimum Tax: So much for a smooth start to tax season

by Tracy Coenen Dec 6th 2007

Filed under: Tax

As the year-end draws near, lawmakers still can't agree on potential changes to the tax code. The current issue is the Alternative Minimum Tax, AMT for short. The AMT was enacted nearly 40 years ago, and was intended to make sure that high-income taxpayers with lots of deductions still paid a minimum level of income taxes.

The problem is that the tax code hasn't kept up with inflation, and what was once considered "high income" is now applicable to some taxpayers in today's middle class.

Republicans want to change the AMT rules so they apply to higher income earners. Democrats are unwilling to change the rules unless they can collect those taxes elsewhere. Some say the "cost" of changing the AMT rules will be a $50 billion decrease in tax collections each year.

Tags: Alternative Minimun Tax, AlternativeMinimunTax, AMT, IRS, tax season, TaxSeason

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