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AMT Patch proposed for 2012, 2013

"The Family and Business Tax Cut Certainty Bill of 2012 (Sen 3521 ) would patch the alternative minimum tax (AMT) for the 2012 and 2013 tax years for an estimated revenue loss of $132.2 billion." Full text of the bill:   It also extends several other popular tax provisions: the deduction for teachers who buy supplies for their classrooms; the exclusion from income of debt forgiveness related to one's primary home (ie. if your home is foreclosed and your debt discharged, without this extension, the discharged debt is taxed as income!); the ability to make tax-free distributions from IRAs to charities; and more.  But it's the AMT patch which is the real headline here. The numbers are shocking. And make no mistake - more people fall into AMT now because they've had tax cuts to their "regular" income taxes. If the Bush tax cuts expire, the AMT collects an "extra" $1.3 *trillion* over the next 10 years. If they Bush tax cuts are extended, the AMT collects an "extra" $2.7 *trillion. The link below is to an article at CCH, tax experts, about the AMT patch and the effect on deficits if a permanent AMT patch were implemented.
The above is part of my own blog post about there, wherein I hold back my personal opinions a little less:
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David S. Meyers, CFP®
http://www.MeyersMoney.com
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Reply to
David S Meyers CFP
I have mixed feelings about AMT. The intent was good, to keep high earners from paying too little, but for the fact that it's not been adjusted year on year for inflation, it impacts those who maybe shouldn't be impacted. I am in AMT land. The net effect is that I owe AMT, just under $3000 last year, and I see that the effect is to make my property tax not deductible. i.e. regardless of what I enter in the amount paid cell, I end up with the same final tax bill.
My issue is not with my tax burden, per se, but with the complexity of the code. More mortgage interest, and my tax goes down, but my property tax, which I can't impact, is a lost cause.
Reply to
JoeTaxpayer

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