| Congress to change law For AMT for the 2007 Tax Season |
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Congress has now approved a bill calling for a one-year patch for the Alternative Minimum Tax (AMT). The bill will be sent to the President for his approval and he is expected to sign it. If the bill then becomes law approximately 20 million Americans who would have paid about 2,000 in additional taxes under the (AMT) will be spared this tax season.
The (AMT) was originally intended to target the highest income earners who have avoided paying taxes by claiming an array of tax deductions and credits. However, it was not adjusted for inflation. The end result of this law is those who earn as little as 50K per year could have ended up paying additional taxes due to the (AMT). It is not surprising, then that this tax has a negative reputation with taxpayers Experts have some concerns about the timing of this bill as well. The change in this tax law will put an additional burden on the IRS to change the computer software for the 2007 tax returns. The IRS stated that they are making the adjustments and will have the revised copies of the 12 tax forms impacted by the (AMT) legislation posted to IRS government website after the (AMT) patch is signed into law. The same is the case with the tax software prepared by companies who have been pre-selling their tax software. The (AMT) patch will affect the following tax credits:
How will the (AMT) impact you the taxpayer?The new law will change the numbers appearing in the above tax credit forms. It will protect nearly 20 million taxpayers from paying an additional 2,000 in taxes during the 2007 tax season. The IRS states it needs seven weeks to adjust for the (AMT) patch. People who are affected by this law will need to file their taxes the second week in February. Taxpayers will not be able then to file early. The instruction booklets will also be inaccurate due to the fact that lawmakers missed the IRS tax deadline.             |
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| Last Updated ( Monday, 28 January 2008 ) |
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