Tax Article - AMT PatchThe alternative minimum tax (AMT) continues to be a bugaboo for Congress. They understand the need to overhaul the system, but can’t seem to find the key to simplifying it. With time running out, Congress finally approved a “patch” that includes 2007 AMT exemption amounts that are significantly higher than they would have been without the act but only slightly higher than the 2006 amounts. Under the Tax Increase Prevention Act of 2007, signed into law by President Bush on Dec. 26, 2007, the 2007 amounts are:
The IRS and Treasury Department estimated that, without the patch, roughly 25 million taxpayers would have paid on average $2,000 more in taxes for 2007. Once again, this issue will need to be addressed for 2008 because the increased exemption is only for 2007. Find out how our expertise in Tax Services can add value to your business. Email us or call us at 1 (888) 875-9770. The new law provides additional AMT relief by allowing more nonrefundable personal credits, such as the dependent care, Hope and Lifetime Learning credits, to be used to reduce AMT liability. (Many other popular credits, such as the child and adoption credits, were already eligible.) As a result of the changes, the IRS is asking taxpayers filing certain forms to wait to file until Feb. 11, 2008. Affected forms include Form 8863, Education Credits; Form 5695, Residential Energy Credits; and Form 8396, Mortgage Interest Credit. Several other AMT-related forms, however, aren’t affected. It’s also important to note that the 2007 tax materials that you’ll likely receive from the IRS in early January were printed before the new tax laws were passed. related links |
Contact UsCall Us RESOURCES |
