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President Signs One-Year Extension of AMT Patch
President Bush on December 26 signed a one-year extension of the alternative minimum tax
(AMT) patch, effective January 1, 2007. Absent enactment of the temporary fix, the
administration predicted that an estimated 25 million taxpayers would pay on average
an additional $2,000 in taxes for the 2007 tax year.
The Tax Increase Prevention Act of 2007 (HR 3996) increases the AMT exemption amount for
2007 to $44,350 for single taxpayers and heads of households, $66,250 for married couples
filing jointly, and $33,125 for married couples filing separately. The new law allows taxpayers
to use most nonrefundable personal tax credits to offset AMT liability. These include the
dependent care, HOPE and lifetime learning education credits and the District of Columbia
first-time homebuyer's credit.
If you would like to speak to an expert in Cohen & Company's
tax department concerning any of the following info, please email us at
coheninfo@cohencpa.com.
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