AMT Tax

[MrTed46]

Holy sheet, this is the year they revisit this. I really hope they drastically change this tax as it is affecting ALOT more people that it was suppose to when it was first wirtten.

 

Obama better step up to the plate on this one...of course I doubt he will because he is spending alot more than we can chew.

[SteelBunz]

Holy sheet, this is the year they revisit this. I really hope they drastically change this tax as it is affecting ALOT more people that it was suppose to when it was first wirtten.

 

Obama better step up to the plate on this one...of course I doubt he will because he is spending alot more than we can chew.

Hasn't he already said he wouldn't lobby for any change? Basstages.

[MrTed46]

Hasn't he already said he wouldn't lobby for any change? Basstages.

 

I must admit, I am not sure whe he said as I was not following. Is this true? Has he ruled already there will be no change to AMT tax code?

[Ursa Majoris]

AMT was intended to stop the tax dodging rich but every year they have to fiddle with it to avoid it sweeping up thousands of non-rich who aren't dodging anything. Time to revisit the whole concept and preferably shut down the loopholes it was meant to paper over.

[T_bone65]

AMT was intended to stop the tax dodging rich but every year they have to fiddle with it to avoid it sweeping up thousands of non-rich who aren't dodging anything. Time to revisit the whole concept and preferably shut down the loopholes it was meant to paper over.

 

 

This is the first year I have been affected by it, but I know I had to pay another 800 or so

 

ETA: And since I am an employee of the Dept of Treasury I avoid nothing since I get audited every year. I take zero chances for them to take my pay check

Edited February 25, 2010 by T_bone65

[Ursa Majoris]

This is the first year I have been affected by it, but I know I had to pay another 800 or so

 

ETA: And since I am an employee of the Dept of Treasury I avoid nothing since I get audited every year. I take zero chances for them to take my pay check

You got caught in it? You must have a crapload of deductions or something.

[MrTed46]

AMT was intended to stop the tax dodging rich but every year they have to fiddle with it to avoid it sweeping up thousands of non-rich who aren't dodging anything. Time to revisit the whole concept and preferably shut down the loopholes it was meant to paper over.

 

I agree, but will they?

 

If nothing goes unchanged, this will affect my budget alot next year because AMT might go back to pre-2009 levels where 2009 "patch" was suppose to help and that didnt help much. This really pisses me off. This tax actually affects those who barely hit AMT (which is growing) than the rich who definitely get hit with AMT.

[T_bone65]

You got caught in it? You must have a crapload of deductions or something.

 

 

No more then we had last year, mostly mortgage interest.

[MrTed46]

You got caught in it? You must have a crapload of deductions or something.

 

Not true, he can pay local and state taxes which are normally deductions but not deductions at AMT. Fooking mind blowing...

 

http://www.cbo.gov/doc.cfm?index=5386&type=0

 

Allow the Deduction of State and Local Taxes for the AMT. Taxpayers cannot deduct state and local income and property taxes in calculating their taxable income for the AMT. As a result, people in high-tax jurisdictions are more likely to have AMT liability than their counterparts in low-tax areas. Allowing taxpayers to deduct state and local taxes for AMT purposes would eliminate the AMT impact for about 10 million tax units in 2010--roughly one-third of those who would pay AMT in that year under current law. Providing that deduction would reduce federal revenues by about $360 billion between 2005 and 2014.

 

Combining the option to allow deduction of state and local taxes against the AMT with the option to allow dependent exemptions would have substantially larger effects. About 18 million taxpayers with AMT liability under current law would move off the AMT rolls in 2010, at a 10-year revenue cost of roughly $440 billion.

 

 

Conclusions

Over the coming decade, a growing number of taxpayers will become liable for the AMT. In 2010, if nothing is changed, one in five taxpayers will have AMT liability and nearly every married taxpayer with income between $100,000 and $500,000 will owe the alternative tax. Rather than affecting only high-income taxpayers who would otherwise pay no tax, the AMT has extended its reach to many upper-middle-income households. As an increasing number of taxpayers incur the AMT, pressures to reduce or eliminate the tax are likely to grow.

[MrTed46]

No more then we had last year, mostly mortgage interest.

 

Mortgage interest is still deducted luckily. It has to be your local and state taxes that increased if nothing else changed. And if nothing is changed, expect a higher AMT in 2010 because 2009 "patch" was better than lets say 2008 rules.

[SteelBunz]

Mortgage interest is still deducted luckily. It has to be your local and state taxes that increased if nothing else changed. And if nothing is changed, expect a higher AMT in 2010 because 2009 "patch" was better than lets say 2008 rules.

Yes.....but the two deductions allowed under AMT, mortgages and charitable contributions, are the two things Obama wants to target as capped at 28%.....instead of deductible to the extent of your tax bracket.

 

This all could be a double whammy.....especially for households at the lower end of the AMT. Not patching it....and capping the allowable deductions.

 

Stupid congress.....how in the heck do you ever write a tax law without allowing for inflation.

And for that matter......how do you write a law like that and NOT take into account the cost of living in an immediate area of the country?

Edited February 25, 2010 by SteelBunz

[MrTed46]

Yes.....but the two deductions allowed under AMT, mortgages and charitable contributions, are the two things Obama wants to target as capped at 28%.....instead of deductible to the extent of your tax bracket.

 

This all could be a double whammy.....especially for households at the lower end of the AMT. Not patching it....and capping the allowable deductions.

 

Stupid congress.....how in the heck do you ever write a tax law without allowing for inflation.

And for that matter......how do you write a law like that and NOT take into account the cost of living in an immediate area of the country?

 

if this is true and I get capped on my mortgage interest, I might have to sell. I barely get hit with AMT and this will RUIN me.

[yo mama]

AMT is a mess, no doubt. But it raises a significant amount of revenue that the Fed doesn't want to give up. So they just patch it every year in an attempt to readjust the balancing act. I don't expect any significant AMT reform to take place, unless there are spending cuts or tax increases to offset the economic impact. And I don't see Congress having the political where-with-all to make anything like that happen in its current partisan (to the EXTREME!) culture.

Edited February 25, 2010 by yo mama

[MrTed46]

AMT is a mess, no doubt. But it raises a significant amount of revenue that the Fed doesn't want to give up. So they just patch it every year in an attempt to readjust the balancing act. I don't expect any significant AMT reform to take place, unless there are spending cuts or tax increases to offset the economic impact. And I don't see Congress having the political where-with-all to make anything happen in its current partisan (to the EXTREME!) culture.

 

This is what I think as well and is making me very nervous as I am approaching the bottom end of AMT which means my life will be affected driectly and most viciously with this tax.

[MrTed46]

If and when they do make a revision and/or patch to this AMT for 2010 please post it. I do not want to miss and forget it. As I am an accountant, I am a corporate accountant and many tax laws can slip beneath me as I am investing my time with other regulations.

[yo mama]

This is what I think as well and is making me very nervous as I am approaching the bottom end of AMT which means my life will be affected driectly and most viciously with this tax.

The solution to that problem is to start earning less money. I kid! But seriously, if you're in AMT that means you're making a healthy living.

 

But yeah, AMT sucks because it creeps up on you. The first time it caught me very much by by surprise. I'd withheld just the right amount of regular tax, so I figured it was all good. Did my AMT schedule and learned that I owed several thousand dollars I wasn't expecting. These days I just calculate my tax under AMT (which is actually easier than calculating regular tax, IMO) and withhold that amount. But its frustrating because of lot of "tax relief" politicians promise the electorate get thrown out the window when you're in AMT.

[MrTed46]

The solution to that problem is to start earning less money. I kid! But seriously, if you're in AMT that means you're making a healthy living.

 

But yeah, AMT sucks because it creeps up on you. The first time it caught me very much by by surprise. I'd withheld just the right amount of regular tax, so I figured it was all good. Did my AMT schedule and learned that I owed several thousand dollars I wasn't expecting. These days I just calculate my tax under AMT (which is actually easier than calculating regular tax, IMO) and withhold that amount. But its frustrating because of lot of "tax relief" politicians promise the electorate get thrown out the window when you're in AMT.

 

I do make a "healthy" living and the #1 reason I purchased my home was to get the mortgage interest and real estate tax benefit to reduce my taxes. Now I am finding out this may be taken away from me because I am making more money...it is such a disincentive to do this. A "healthy" living will soon start affecting alot more people if this is not adjusted for inflation/cost of living increase. To the govt eyes, everyone will appear to be rich and having to pay this tax.

 

Going forward I will have to do the same, calculate AMT.

Edited February 25, 2010 by MrTed46

[SEC=UGA]

Quit yer bitchin and pay your fair share.

[TimC]

Quit yer bitchin and pay your fair share.

 

+1 Us po folk be needin' stuff.

[i_am_the_swammi]

Quit yer bitchin and pay your fair share.

 

actually, +1

 

I'll never get why people have such an issue with being a part of a society that needs public funds to function.

 

pay your comparitively modest taxes, and be thankful you live in a country as great as the USA.

[MrTed46]

Quit yer bitchin and pay your fair share.

 

I may stop bitching and I will pay my share, but to call it fair is crazy.

[MrTed46]

actually, +1

 

I'll never get why people have such an issue with being a part of a society that needs public funds to function.

 

pay your comparitively modest taxes, and be thankful you live in a country as great as the USA.

 

You dont get it because maybe it doesnt affect you? I must admit, I didnt know about this in this much detail until it affected me. Ignorance is bliss.

[Azazello1313]

AMT was intended to stop the tax dodging rich but every year they have to fiddle with it to avoid it sweeping up thousands of non-rich who aren't dodging anything. Time to revisit the whole concept and preferably shut down the loopholes it was meant to paper over.

 

there's a bi-partisan tax reform proposal on the table that will, among other things, do just that. more info here and here.

[i_am_the_swammi]

You dont get it because maybe it doesnt affect you? I must admit, I didnt know about this in this much detail until it affected me. Ignorance is bliss.

 

It does affect me, and it sucks, but I do realize it is a necessary evil, so I tolerate it and understand that if those that owe it (and other taxes) would stop worrying about how to skirt/reduce their tax liability, perhaps our country can improve its financial position and start moving forward again?

 

Had those tax cuts that were instituted several years ago not been applied, we'd be a trillion times better (literally) as a nation than we are.

[MrTed46]

It does affect me, and it sucks, but I do realize it is a necessary evil, so I tolerate it and understand that if those that owe it (and other taxes) would stop worrying about how to skirt/reduce their tax liability, perhaps our country can improve its financial position and start moving forward again?

 

Had those tax cuts that were instituted several years ago not been applied, we'd be a trillion times better (literally) as a nation than we are.

 

Then I applaud you, because my understanding is that you are ok with paying a tax most do not pay to benefit the better of the country, especially those who do not pay this tax.

 

I on the same boat as you are but I feel everyone should pay the same tax rate % wise (flat tax) or go with a consumption tax if you want to hit the wealthy (high luxury tax).

 

The number 1 thing that really irks me about this and maybe you are missing my point or maybe do not care, I am not making tons of $, I am making enough to support my needs which includes being a home owner. This tax was literally invented and intended to strike a fraction of the population and since then was never adjusted so now it is affecting people like me, who own a home. I am not making enough money just to be annoyed at this tax, I am making enough money to pay and live up to my contractual commitment to the bank.

 

If our wonderful govt requires the need to exempt interest, local taxes and real estate taxes to support itself, then do it ACROSS he board.