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yet another Microsoft blogger

# Thursday, June 21, 2007

It's June, and no AMT Tax Relief

If you aren't factoring the AMT into your taxes, and you:

  • have a mortgage
  • live in a state with income tax
  • have high property taxes

then get ready to pay the Government a few thousand dollars on April 15th 2008. As of now, there is no AMT tax relief in site for tax year 2007.

To come up with a realistic picture of my tax liability here is what I do. I factor my AGI (Adjusted Gross Income) by not including state income and property taxes into my AGI. In other words, the only deductions that I factor are:

  • Mortgage Interest
  • Charitable Donations
  • Personal Exemptions for myself, my wife, my child

And that's it. By doing this it offers me a simple way to calculate my paycheck withholding without using an AMT calculator.

BTW, I have paid the AMT tax for the past 3 years. However, in those years congress passed temporary relief that moved the floor of the AMT to adjust for inflation since the AMT rules originally went into effect. This year the AMT floor is the same as it was in 1969.

Hopefully something will be done about the AMT this year, but I would not bet on it as this revenue is factored into our budget, and offering relief will only serve to broaden the gap between our spending and our tax revenue.

 

Thursday, June 21, 2007 10:18:34 AM (Pacific Daylight Time, UTC-07:00)
Be careful what you wish for. I've paid AMT for 5 years now and my belief is that is they 'fix' AMT they won't do it by changing the total tax dollars the government takes in. That means they'll relax the burden on people who really can't afford to pay AMT and increase the burden on those that can. That would be me.
dino
Thursday, June 21, 2007 11:56:09 AM (Pacific Daylight Time, UTC-07:00)
Well, that might well be true. IMHO the most reasonable thing to do would be to allow for property tax and state income tax witholding from the AMT and keep things the same

OR

Index the AMT floor for inflation.
Omar Shahine
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