A deadline looms today, and it will not be met. Unless Congress fixes the Alternative Minimum Tax (AMT), the IRS will have no choice but to print next year’s tax forms based on current law, which would force 25 million taxpayers to pay, on average, an unexpected, additional ,000 in taxes.

If the AMT is fixed after today’s deadline, the Treasury Department announced in a letter to Congress, then the delay in printing proper IRS forms will create confusion for millions of taxpayers this spring and delay tens of millions of taxpayers’ refund checks by up to two and a half months.

Democrats are the ones responsible for this — for creating the tax in the first place, for raising it, and for failing to fix it in time. Most responsible of all for the current mess, and for Congress’s failure to act, is House Ways and Means Chairman Charlie Rangel (D., N.Y.).

The Alternative Minimum Tax was originally enacted by a Democratic Congress in 1969, in order to stop a handful of wealthy families from using deductions and loopholes to avoid tax liability altogether. But the high income threshold at which the tax is triggered was never indexed to inflation. In 1993, the Democratic Congress and President Clinton raised the AMT tax rate, but again failed to index for inflation.

As a result, inflation is carrying more and more workers across the AMT threshold each year. Congress, therefore, has had to “patch” the tax temporarily each year, raising the threshold at which it must be paid. If Congress does nothing, the government tax collections would increase through the AMT, dramatically and entirely by accident.

Republicans view the AMT’s expanding reach as a mistake. They passed a repeal of the tax in 1999, only to see it vetoed by President Clinton. In more recent years, they lacked the courage to fix it permanently because it would have invited screams of “tax cuts for the rich,” and made future deficits look much worse on paper. Yet when they controlled Congress, at least Republicans “patched” the AMT each year so that millions of taxpayers could avoid paying all that extra money.

Publicly, Democrats pretend that they, too, consider it a “mistake” for the AMT to ensnare roughly 25 million taxpayers. But their actions now speak louder than their words. They passed an AMT “patch” last Friday — H.R. 3996 — but it raises taxes on small businesses and entrepreneurs by billion, in order to recover the revenue that is “lost” by not mistakenly ensnaring millions of Americans in the AMT.

With the Democrats’ so-called “pay-as-you-go” rule in hand, and under the guise of “fiscal responsibility,” Chairman Rangel is essentially blackmailing taxpayers: “Either support us in our mission to hike taxes, or we’re going to let the AMT have all 25 million of you!”

A spokeswoman for Rangel was sticking to this “fiscal responsibility” line on Wednesday, and indicated that the tax-hike bill that Democrats passed last week along party lines took care of AMT, and that was that. But the bill they passed has absolutely no chance of passing the Senate, and even less of being signed by President Bush — something of which House Democrats have been aware all along.

Senate Democrats are not happy about what their colleagues have done here. Even Democrats in the House resented that they were being pressured by their own leadership to vote for a large tax hike. “Why should House members have to walk the plank?” asked Rep. Jim Cooper (D-Tenn), speaking to Congress Daily. “This is a 130 percent tax increase.”

Rangel does not appear to have thought this one through quite as well as he usually does. By failing to act, he may be putting his party’s pinkie finger on a new “third rail” of politics.

Everyone expects the AMT to be fixed this year for the same reason it always has been fixed in the past — failure to do it could cause a taxpayer rebellion. If, as appears likely, Congress fails to pass a real AMT fix before today’s deadline, it will probably be fixed eventually. But many taxpayers will end up with obsolete tax forms (12 different forms are affected by the AMT), creating a huge snag for the IRS. An astounding billion in tax refunds to as many as 50 million people could be delayed for up to ten weeks.

That’s great news if you’re a government bean-counter, because you’re essentially getting an interest-free loan of billion from American taxpayers. It’s very bad news, though, if you are a taxpayer trying to pay your energy bills, your child’s tuition, or your overpriced mortgage.

It might also be bad news if you are a Democratic politician who helped create the Great Tax Confusion of 2008.

Why on the BIG issues that were put before him in office, did he choose NOT TO VOTE. But he voted and pushed for little meaningless things like "Congradulating the White sox on winning the World Series??"

Examples:

2/28/08 Vote 35: On the Cloture Motion: Motion to Invoke Cloture on the Motion to Proceed to H.R.3221; New Direction for Energy Independence, National Security, and Consumer Protection Act and the Renewable Energy and Energy Conservation Tax Act of 2007 : NOT VOTING

2/26/08 Vote 33: On the Cloture Motion: Motion to Invoke Cloture on the Motion to Proceed to Consider S. 2633; A bill to provide for the safe redeployment of United States troops from Iraq. NOT VOTING

2/7/08 Vote 10: H R 5140: H.R. 5140 As Amended; Recovery Rebates and Economic Stimulus for the American People Act of 2008 : NOT VOTING

4/10/08 Vote 95: H R 3221: Ensign Amdt. No. 4419; To amend the Internal Revenue Code of 1986 to provide for the limited continuation of clean energy production incentives and incentives to improve energy efficiency in order to prevent a downturn in these sectors that would result from a lapse in the tax law. NOT VOTING

4/4/08 Vote 91: H R 3221: Voinovich Amdt. No. 4406 As Modified; To protect families most vulnerable to foreclosure due to a sudden loss of income by extending the depreciation incentive to loss companies that have accumulated alternative minimum tax and research and development tax credits. NOT VOTING

4/3/08 Vote 87: S RES 501: S. Res. 501; A resolution honoring the sacrifice of the members of the United States Armed Forces who have been killed in Iraq and Afghanistan. NOT VOTING

Yet he did vote inbetween all those votes for things like:

3/14/08 Vote 82: S CON RES 70: DeMint Amdt. No. 4339; To provide for a deficit-neutral reserve fund for providing an above the line Federal income tax deduction for individuals purchasing health insurance outside the workplace. VOTED NO

3/13/08 Vote 77: S CON RES 70: Kyl Amdt. No. 4372; To protect small businesses, family ranches and farms from the Death Tax by providing a million exemption, a low rate for smaller estates and a maximum rate no higher than 35% VOTED NO

Im confused, if he is so for or against these like he says, why didnt he vote? And if he is for small falmilies and those needing insurance, why did he vote against them?? Any help ??

Why on the BIG issues that were put before him in office, did he choose NOT TO VOTE. But he voted and pushed for little meaningless things like "Congratulating the White sox on winning the World Series??"

Examples:

2/28/08 Vote 35: On the Cloture Motion: Motion to Invoke Cloture on the Motion to Proceed to H.R.3221; New Direction for Energy Independence, National Security, and Consumer Protection Act and the Renewable Energy and Energy Conservation Tax Act of 2007 : NOT VOTING

2/26/08 Vote 33: On the Cloture Motion: Motion to Invoke Cloture on the Motion to Proceed to Consider S. 2633; A bill to provide for the safe redeployment of United States troops from Iraq. NOT VOTING

2/7/08 Vote 10: H R 5140: H.R. 5140 As Amended; Recovery Rebates and Economic Stimulus for the American People Act of 2008 : NOT VOTING

4/10/08 Vote 95: H R 3221: Ensign Amdt. No. 4419; To amend the Internal Revenue Code of 1986 to provide for the limited continuation of clean energy production incentives and incentives to improve energy efficiency in order to prevent a downturn in these sectors that would result from a lapse in the tax law. NOT VOTING

4/4/08 Vote 91: H R 3221: Voinovich Amdt. No. 4406 As Modified; To protect families most vulnerable to foreclosure due to a sudden loss of income by extending the depreciation incentive to loss companies that have accumulated alternative minimum tax and research and development tax credits. NOT VOTING

4/3/08 Vote 87: S RES 501: S. Res. 501; A resolution honoring the sacrifice of the members of the United States Armed Forces who have been killed in Iraq and Afghanistan. NOT VOTING

Yet he did vote in between all those votes for things like:

3/14/08 Vote 82: S CON RES 70: DeMint Amdt. No. 4339; To provide for a deficit-neutral reserve fund for providing an above the line Federal income tax deduction for individuals purchasing health insurance outside the workplace. VOTED NO

3/13/08 Vote 77: S CON RES 70: Kyl Amdt. No. 4372; To protect small businesses, family ranches and farms from the Death Tax by providing a million exemption, a low rate for smaller estates and a maximum rate no higher than 35% VOTED NO

Im confused, if he is so for or against these like he says, why didnt he vote? And if he is for small business and families and those needing insurance, why did he vote against them?? Any help ??

Would this do more to stimulate the economy?

http://www.reuters.com/article/governmentFilingsNews/idUSN2853502020090128

(I am not sure why, but some bot deleted this question)

* Cut the lowest two income tax rates for 2009 and 2010, from 15 percent to 10 percent and from 10 percent to 5 percent.

* Extend through 2010 a patch to the Alternative Minimum Tax, which was originally designed to ensure that wealthy people pay taxes, but instead would hit millions of middle-income families with higher taxes.

* Expand the ,500 first-time homebuyers tax credit for a principal residence to all homebuyers while limiting it to purchasers who can make a down payment of at least 5 percent of the purchase price.

* Provide a tax deduction for small businesses with less than 500 employees equal to 20 percent of their income.

* Offer new tax deduction for those who do not receive tax-preferred, employer-sponsored health care coverage. And provide assistance to the unemployed who do not qualify for a COBRA premium subsidy.

* Give tax exemption on unemployment benefits and extend temporary federal unemployment benefits through 2009, phasing it out through mid-2010.

* Allow companies to write off current losses against previous tax years for up to five years. Companies now can only "carry back" losses for two years. The tax break would not be available to banks and other companies receiving help from the 0 billion bailout package.

* Extend through 2009 a break for small businesses that allows them to immediately write off up certain capital expenditures. (Reporting by Jeremy Pelofsky, editing by David Wiessler)

OK, I e-filed my tax return, form 1040, using TurboTax. I’ve already received my federal and state checks. However, a couple of days ago, a relative of mine has informed me that I have land as part of a partnership and that I need to file an amendment to my tax return. He gave me form 1065 – Partner’s Share of Income, Deductions, Credits, etc. Being that I’ve filed as an independent and have no children, I figured I would try to not use a CPA and do this amendment myself. How do I go about doing this using TurboTax? Do I really need to purchase the Business software that they recommend? I’m really confused. Also, will this affect the amount of student loans that I’ll be receiving?
Boxes filled on 1065:
2 – Net rental real estate income (loss) – 361
5 – Interest income – 194
7 – Royalties – 0
17 – Alternative minimum tax items – 0
19 A & B – Distributions – 0
20 – Other information – 194

All other boxes are empty. Any help is appreciated, thank you!!
I know I prob shouldn’t have posted the financial info, it’s really not a lot of land and I have nothing to hide financially, I’m just a little upset at the relative for popping up with this so late and the fact that I didn’t know about it for so long among other things….

JACKSONVILLE, Florida (Reuters) – Republican presidential contender Mitt Romney said on Saturday his 3.4 billion U.S. economic stimulus plan would rescue an economy on the "tipping point" of recession. His plan foresees 1.4 billion in stimulus to corporate America in measures that include permanently reducing the corporate tax rate to 20 percent from 35 percent over two years and allowing businesses to depreciate the value of new equipment purchases faster.

McCain has voiced apprehension over proposals for temporary tax cuts and more spending as suggested by many Democrats and Republicans, saying they result in additional strains on resources. McCain has instead proposed cuts in corporate taxes from 35 percent to 25 percent, extension of Bush’s tax cuts, and elimination of the Alternative Minimum Tax, which was enacted to prevent wealthy taxpayers from using many deductions to avoid federal income taxes.
so not only does it seem they favor big business but it is actually their beleive that it is the best way to adress our economic issues.

i now understand how that 0.00 a year that the bush tax cuts have saved me is really due to the added economic growth due to the billions in tax credits given to oil corporations, who have used those credits to help keep the price of food, fuel and transportation down…… due to their brilliant development and research programs and the republican led business revival these oil giants some how managed to see historic profit margins. thanks to those wonderful incentives and republican management of the economy we have seen millions of jobs created
(minimum wage service sector jobs, which don’t come with a pension or 401k or health insurance….)
to make up for the higher pay industrial jobs which have been lost.

i was wrong, i don’t understand how i missed how much the wonderful job done by our leadership in washington had done for us

The small business here is operating at a loss. The expenses exceed the income and the business is being propped up by loans from the owner’s savings. There are deductions for business expenses, but the business runs into the alternative minimum tax and not all of the tax deductible expenses can be deducted. Refunds (partial refunds) are frequently given to customers because they pay a deposit. The entire deposit is deposited when paid and is considered income. Though the partial refunds are "tax deductible" I am concerned because of the low income and high expenses making it impossible to get the full deduction for expenses. Any suggestions for making the best of this situation? Essentially, we sometimes pay tax on money that ends up being refunded to the customer. Thanks.