atpcliff
18th Apr 2008, 17:10
Hi!
Are you ready to be screwed by the AMT?
My Experience:
We have NEVER owed taxes to the Federal Government at the end of the year, and the lowest we EVER received was at over $1K. This year, because of the AMT, we OWED $3.6K. We make less than $150K.
Other Viewpoints:
"I am at a loss to figure out how a simple $4K increase in pay, coupled with a $2K larger pretax flexible spending deduction (this year), and(sic) the same two dependents under 17, that I go from getting a $1400 refund and never having to pay AMT (last year) to not only paying AMT, but owing $2600 this year. I dread this year's return. It is hard not to cry.
"Nina Olson, the IRS National Taxpayer Advocate, says if there were one single change she could make in the tax laws, it would be to eliminate the AMT.
"What is unbelievable is that a majority of Americans do not know or understand the AMT. When I talk to co-workers and friends they have no clue of what AMT means. People who have an understanding of the AMT need to get the word out because this is very important!
AMT:
The Alternative Minimum Tax was instituted in 1969 to prevent very wealthy people from paying NO income tax (there were only about 155 taxpayers in this category). If they were able to find enough loopholes to not pay Income Tax, the AMT would catch them and make them pay their fair share.
Unfortunately, the AMT was NOT indexed for inflation, so what was a LOT of income in 1969, is still the income floor for AMT now. Inflation has gone up a LOT in the last 40 years!
What upsets me off, royally, is that there are a number of taxpayers earning $1mill+, who are STILL paying NO income tax, even with the AMT!
What's even worse, is that the AMT tax rates are at 26% and 28% of your income. So the wealthiest Americans aren't subject to the AMT at all, as the max Income Tax rates are 33% and 35%. So, we, the Middle-Class and Upper Middle-Class taxpayers, have to pay an additional tax that the rich don't!
“The only acceptable form of Socialism in the U.S. is Socialism for the rich.”
If U haven't paid AMT yet, get ready. The last three or four years Congress has raised the income floor for AMT, to try and prevent a wholesale taxpayer revolt. Unless they keep this up every year, or abolish the AMT, U WILL get screwed, if you're a professional pilot!
When our president and Congress voted in "Tax Cuts" several years ago, they knew they were pulling the wool over our eyes. Why? Because they knew that the AMT would start bringing in HUGE money for the Feds in the coming years, and the cuts in the Income Tax wouldn't be relevant to the Feds ever-increasing need for more money.
2013 is the year that AMT is scheduled to actually bring in MORE revenue than the regular Income Tax. In other words, the Federal gov't would get more revenue by deleting ALL Income Taxes than they would be doing away with the AMT.
If you're not already paying AMT, get out the lube!
The AMT does NOT allow for many common deductions, including Property Tax, Personal and Dependent Exemptions, State Income Tax, Sales Tax, and even the Standard Deduction, if you don't itemize.
If you DO itemize, these deductions are some of the ones lost: Unreimbursed Business Expenses, Investment Expenses, some Medical and Dental expenses, etc., etc. About the only deductions that work for AMT are charitable contributions. And, if you own a business on the side, you WILL need a tax accountant to figure it out, it's so complicated.
If your AGI (Adjusted Gross Income) is over about $45K, the IRS Form 6251 and the 10 Pages of Instructions HAVE to be completed to even FIND OUT if you have to pay the AMT! If you DON'T complete this form, and owe AMT, the IRS will make you pay the AMT taxes you owed and a penalty because you didn't pay them in the first place!
General Info:
http://www.washingtonpost.com/wp-dyn/content/article/2005/05/28/AR2005052800184_pf.html
More Technical Info:
http://www.smartmoney.com/tax/filing/index.cfm?story=amt
Very User Friendly Info from AOL-Explaination and Help With Calculating AMT:
http://money.aol.com/tax/article/bankrate/_a/beware-the-complicated-and-costly-amt/20080123143409990001
IRS:
Description:
http://www.irs.gov/taxtopics/tc556.html
The 2 Page Form:
http://www.irs.ustreas.gov/pub/irs-pdf/f6251.pdf
The 10 Pages of Instructions:
http://www.irs.ustreas.gov/pub/irs-pdf/i6251.pdf
There are some great solutions-Here are My Favorite Three, in preferential order:
1-Get rid of the Income Tax completely and switch to a Federal Sales Tax (or a VAT-Value Added Tax)
2-Create a "simplified" Income Tax, where you take ALL the money you receive in a year, from ALL sources, and pay taxes on that amount with NO deductions or exemptions
3-Create a Flat Tax, with one tax rate for everyone, where you take ALL the money you receive in a year, from ALL sources, and pay taxes on that amount with NO deductions or exemptions
What Can YOU DO to Help Change our Tax System, so Everyone Pays their Fair Share???
http://www.fairtax.org/site/PageServer
http://www.freedomworks.org/informed/key_template.php?issue_it=17
God Bless!
cliff
YIP
Are you ready to be screwed by the AMT?
My Experience:
We have NEVER owed taxes to the Federal Government at the end of the year, and the lowest we EVER received was at over $1K. This year, because of the AMT, we OWED $3.6K. We make less than $150K.
Other Viewpoints:
"I am at a loss to figure out how a simple $4K increase in pay, coupled with a $2K larger pretax flexible spending deduction (this year), and(sic) the same two dependents under 17, that I go from getting a $1400 refund and never having to pay AMT (last year) to not only paying AMT, but owing $2600 this year. I dread this year's return. It is hard not to cry.
"Nina Olson, the IRS National Taxpayer Advocate, says if there were one single change she could make in the tax laws, it would be to eliminate the AMT.
"What is unbelievable is that a majority of Americans do not know or understand the AMT. When I talk to co-workers and friends they have no clue of what AMT means. People who have an understanding of the AMT need to get the word out because this is very important!
AMT:
The Alternative Minimum Tax was instituted in 1969 to prevent very wealthy people from paying NO income tax (there were only about 155 taxpayers in this category). If they were able to find enough loopholes to not pay Income Tax, the AMT would catch them and make them pay their fair share.
Unfortunately, the AMT was NOT indexed for inflation, so what was a LOT of income in 1969, is still the income floor for AMT now. Inflation has gone up a LOT in the last 40 years!
What upsets me off, royally, is that there are a number of taxpayers earning $1mill+, who are STILL paying NO income tax, even with the AMT!
What's even worse, is that the AMT tax rates are at 26% and 28% of your income. So the wealthiest Americans aren't subject to the AMT at all, as the max Income Tax rates are 33% and 35%. So, we, the Middle-Class and Upper Middle-Class taxpayers, have to pay an additional tax that the rich don't!
“The only acceptable form of Socialism in the U.S. is Socialism for the rich.”
If U haven't paid AMT yet, get ready. The last three or four years Congress has raised the income floor for AMT, to try and prevent a wholesale taxpayer revolt. Unless they keep this up every year, or abolish the AMT, U WILL get screwed, if you're a professional pilot!
When our president and Congress voted in "Tax Cuts" several years ago, they knew they were pulling the wool over our eyes. Why? Because they knew that the AMT would start bringing in HUGE money for the Feds in the coming years, and the cuts in the Income Tax wouldn't be relevant to the Feds ever-increasing need for more money.
2013 is the year that AMT is scheduled to actually bring in MORE revenue than the regular Income Tax. In other words, the Federal gov't would get more revenue by deleting ALL Income Taxes than they would be doing away with the AMT.
If you're not already paying AMT, get out the lube!
The AMT does NOT allow for many common deductions, including Property Tax, Personal and Dependent Exemptions, State Income Tax, Sales Tax, and even the Standard Deduction, if you don't itemize.
If you DO itemize, these deductions are some of the ones lost: Unreimbursed Business Expenses, Investment Expenses, some Medical and Dental expenses, etc., etc. About the only deductions that work for AMT are charitable contributions. And, if you own a business on the side, you WILL need a tax accountant to figure it out, it's so complicated.
If your AGI (Adjusted Gross Income) is over about $45K, the IRS Form 6251 and the 10 Pages of Instructions HAVE to be completed to even FIND OUT if you have to pay the AMT! If you DON'T complete this form, and owe AMT, the IRS will make you pay the AMT taxes you owed and a penalty because you didn't pay them in the first place!
General Info:
http://www.washingtonpost.com/wp-dyn/content/article/2005/05/28/AR2005052800184_pf.html
More Technical Info:
http://www.smartmoney.com/tax/filing/index.cfm?story=amt
Very User Friendly Info from AOL-Explaination and Help With Calculating AMT:
http://money.aol.com/tax/article/bankrate/_a/beware-the-complicated-and-costly-amt/20080123143409990001
IRS:
Description:
http://www.irs.gov/taxtopics/tc556.html
The 2 Page Form:
http://www.irs.ustreas.gov/pub/irs-pdf/f6251.pdf
The 10 Pages of Instructions:
http://www.irs.ustreas.gov/pub/irs-pdf/i6251.pdf
There are some great solutions-Here are My Favorite Three, in preferential order:
1-Get rid of the Income Tax completely and switch to a Federal Sales Tax (or a VAT-Value Added Tax)
2-Create a "simplified" Income Tax, where you take ALL the money you receive in a year, from ALL sources, and pay taxes on that amount with NO deductions or exemptions
3-Create a Flat Tax, with one tax rate for everyone, where you take ALL the money you receive in a year, from ALL sources, and pay taxes on that amount with NO deductions or exemptions
What Can YOU DO to Help Change our Tax System, so Everyone Pays their Fair Share???
http://www.fairtax.org/site/PageServer
http://www.freedomworks.org/informed/key_template.php?issue_it=17
God Bless!
cliff
YIP