Today we hear from Dean in Pennsylvania who wants to know, “Has the AMT for 2007 been ‘officially’ lowered by the IRS from $62,550 to $45,000? I can’t find mention of this on IRS website.”
You can find the answer in the instructions to Form 6251, the Alternative Minimum Tax Form:
As you can see, for couples, in 2006, the exemption $62,550 also for qualifying widowers, $42,500 for singles and heads of household, and $31,275 for married persons filing separately.
However, for 2007, the number did drop to $45,000:
AMT exemption amount decreased. The AMT exemption amount has decreased to $33,750 ($45,000 if married filing jointly or qualifying widow(er); $22,500 if married filing separately).
Sigh, looks like you’re right. Clearly, Congress is unclear on the concept!
The concept of the AMT was to ensure the wealthy do not avoid paying taxes.
And the Earned Income Credit, which was designed to ensure that the poor get some extra help, is presently set to cover married couples earning up to $39,783:
Earned income amount increased. The maximum amount of income you can earn and still get the credit has increased for 2007. You may be able to take the credit if:
·You have more than one qualifying child and you earn less than $37,783 ($39,783 if married filing jointly),
·You have one qualifying child and you earn less than $33,241 ($35,241 if married filing jointly), or
·You do not have a qualifying child and you earn less than $12,590 ($14,590 if married filing jointly).
So that tells us, Congress thinks the difference between poverty and wealth is only $5,217. Hmmm…Has anyone explained economics to the Senate and the House?
And remember, you can find answers to all kinds of questions about the Alternative Minimum Tax and all kinds of other tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
- Ask TaxMama :: Where taxes are fun and answers are free
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- IRS Form 6251 :: Alternative Minimum Tax Form
- Tax Law Changes for Individuals :: Alternative Minimum Taxes for 2007
- Tax Law Changes for Individuals :: Earned Income Credit for 2007