More On The Alternative Minimum Tax

Because Congress dragged their feet on the Alternative Minimum Tax issue, there may be as many as 13 million taxpayers who are affected by this. At least the filing season is expected to start on time, with the IRS accepting returns starting on January 14.

However, there are 5 forms that will not be accepted by the IRS no earlier than Feb. 11. Those affected are the Education Credits, Residential Energy Credits, Child and Dependent Care Expenses, Mortgage Interest Credit, and the District of Columbia First Time Homebuyer credit. If you are affected by any of these credits, you should wait until then to file your return, or you could file without using the credits and file an ammended return, though that might be too much for most taxpayers.

Tim

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Bush: 'Alternative minimum tax' must be fixed

WASHINGTON (AP) -- President Bush demanded Saturday that Congress send him legislation that keeps middle-class Americans from being hit at tax time next year by the dreaded alternative minimum tax.

That's not likely to happen anytime soon. Congress has adjourned for the Thanksgiving holiday.

The legislation is muddled in the House and Senate. And Bush has threatened to veto any bill that raises taxes as a way of fixing the tax, known in shorthand as AMT.

"I will veto any bill that raises taxes as a condition of fixing the AMT," Bush said in his weekly radio address. "Members of Congress must put political theater behind them, fix the AMT and protect America's middle class from an unfair tax hike."

The AMT was created in 1969 to ensure that a small number of wealthy people could not use tax breaks or deductions to avoid paying any taxes.

It was never indexed for inflation, and every year the AMT net falls on more middle-income taxpayers. This year some 4 million people were subject to the tax.

If Congress and the White House do not reach a compromise by the end of the year, anywhere from 21 million to 25 million middle-income taxpayers will be subject to it, costing them as much as $2,000 in extra taxes.

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