Beware the Complicated
And Costly AMT
By Kay Bell Bankrate.com
Three letters, AMT, are striking tax fear in the hearts of more and more middle-class filers.
These folks are simply trying to use the tax code, legally, to lower their annual Internal Revenue Service bills. They claim exemptions for eligible dependents, deduct the interest on their mortgage and associated equity loan, and write off the state income taxes they pay. Some of these tax breaks, however, will do them no good under the alternative minimum tax system.
Commonly referred to as the AMT, this tax has its own set of rates (26 percent and 28 percent) and requires a separate computation that could substantially boost your tax bill. Basically, it's the difference between your regular tax bill, figured using ordinary income tax rates, and your AMT bill, figured by filling out more IRS paperwork. When there's a difference, you must pay that amount, the AMT, in addition to your regular tax.
Photo Gallery
Believe it or not, the Internal Revenue Service doesn't require a return from some people.
Who Has to File a Tax Return?
Recent Comments
SylMaryKay 10:29:28 PM Apr 12 2008
How many times do I have to enter before your system updates?
SylMaryKay 10:28:11 PM Apr 12 2008
IF we are all equal, why don't we have the same medical insurance benefits that our govermment has? Why should they fix the system, they would have to suffer like the average American does. In Ohio, the school system suffers because all the law makers in the state government are breaking the law, do you see any of them jailed?
If we committed a crime, immediately we get lockup - how about the 7 years they have been ordered to fix the system and do you see them, sitting in jaiol?
Can we collect all of them with a citizens arrest. Let's move Ohioians, get all the same ones in past 7 years OUT looking for a job they can do and complete, instead of procratinating and breaking the law for 7 years!
Ruy Ferraz 09:08:59 AM Mar 22 2008
The problem with all of this, is that we will be voting for the same lame politicians, and come november, whom ever wins the presidency, has some many political favors to pay back to the ones that financed their campaigns, that nothing will be done about it. Take New Jersey, a local radio station tried to convince voters to vote out all the incumbents from the state senate....What happended? the same crooks were all voted back in...wishing there was a strong 3rd independent party in this country to help clean house...
Bear Seas 09:43:49 AM Mar 11 2008
Don't you know that "It takes a village". to raise a child? What was really meant was--- It takes all the villagers giving the Government all their money so the Gov can raise your child the way they think it should be raised.
America is becoming a 3 world country and the Politicians don't care. I weep for the loss of our Freedoms and security.
WGoldst540 01:26:11 PM Mar 09 2008
I AM TIRED AND ANGRY ABOUT THE INCREASE TAX BURDEN THAT MOST AMERICANS HAVE TO PAY . MOST PEOPLE ARE IN THE 25 TO 28% TAX BEACKETAND THIS GROUP PAYS A LARGE PERCENT OF INCOME TO FEDERAL AND STATE GOVT. IN MANY CASES WE ARE TAXED TWICE. FOR EXAMPLE WHILE YOU ARE EMPLOYED YOU PAY A SOCIAL SECURITY TAX. UPON RETIRING THE FED GOVT TAXES 85% OF THE REVENUE RETIRED PEOPLE EARN FROM SOCIAL SECURITY INCOME. IF YOU EARN 18000 AYEAR THE FEDS TAX 15400 0F THAT AMOUNT. IF YOU ARE IN THE 25% TAX BRACKET THE FEDS TAKE $3850.00 FROM YOUR SOCIAL SECURITY INCOME. THIS IS WRONG. WE HAVE PAID SS TAX FOR OVER 30 YEARS. IT DOES NOT PAY TO WORK .THE GOVT TAKES 30 % OF YOUR INCOME. I AM ANGRY AND TIRED OF PAYING FOR THE MISAPPRORIATIONS OF FUNDS BY POLITICIANS. IT IS TIME FOR US TO SAY ENOUGH IS ENOUGH. STAND WITH ME AND VOTE ALL ELECTED OFFICALS OUT OF OFFICE WHO DO NOT SUPPOR AN EQUITABLE TAX SYSTEM.
Scottilla 01:23:59 PM Mar 03 2008
I don't get it. Single rate, no deductions, What's complicated?
CHARLEY3229 01:42:07 PM Feb 23 2008
we as americans need to srand up and just say NO we are not paying you anymore and stop paying or letting the goverment just take it what is wrong with us? we should be in controll of our money not the goverment they are living high off us. We are STUPID not the goverment this would not happen in europe
Specsman71 06:01:22 PM Feb 17 2008
Easy solution,. Renownce your American citizenship, become a citizen of Mexico, sneek back across the border get a job in the U.S. You don't have to pay income taxes, free medical care, free college tuition and you automatically become a member of the Democratic party.
Vigolzone 02:01:49 PM Feb 16 2008
Why save? You are peanilized for saving moneyExample My friend and I both make 60,000 per year. Her tax rate is low. Because I declare interest etc. I pay much more Tax should be based on salary.
DEVLINSON 11:47:00 AM Feb 16 2008
Forget about sales and income taxes. Replace them with wealth taxs. Everyone should pay a percentage of their net worth. Pretty simple to calculate. We already know the value of real estate and stocks and bank accounts. Any property not claimed can be taken because obviously noone owns it. Easy to hide income. Hard to hide a house or factory. We can even index it, 2 percent on the first 500,000 and 4 percent on everything over that.
Taxes: Basics
Anyone seeking help with taxes should start with the fundamentals. Here are the basics of taxes.
- Who Must File a Return
- Audits & Penalties
- Taxes on Capital Gains
- Withholding Your Taxes
- Common Tax Credits
- Personal Exemptions
- All About AMT Tax
- Calculate Taxable Income
- Itemizing Deductions
- Filing a Return Online
- 2007 Tax Brackets
- 2008 Tax Brackets
- Standard Deductions
- How to File an Extension
Tax Specials
Stay on top of tax season with these timely features.
- Top 5 New Tax Laws
- Top 5 Audit Red Flags
- 13 Most Overlooked Tax Deductions
- 12 Most Common Taxpayer Mistakes to Avoid
- Top Tips for Procrasinators
- Which Tax Form Should You Use?
- 10 Sure-Fire Tax Breaks
- Do-It-Yourself Tax Savings for All Life Stages
- 7 Filing Fears That Freak Out Taxpayers
- Famous Tax Cheats
- 10 Tax Preparer Secrets
- Top 10 Must-Know Tax Terms
- World's Top Tax Havens
- Biggest Tax Procastinating Cities
- 10 Wackiest Tax Deductions
- Dirty Dozen Tax Scams to Avoid
- 8 Hidden Taxes