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Financial Planning > Tax Planning > Tax Loss Harvesting

Expansion of AMT Put Off

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A flurry of last-minute legislative action by the 110th Congress included a bill that postpones by a year expansion of the alternative minimum tax to millions of taxpayers–from four million to 25 million, according to the White House, which said President Bush would sign the bill. The House approved the Senate version of the AMT patch–the Tax Increase Prevention Act of 2007–by a vote of 352-64. However, the bill does not include any revenue-raising measures to offset the anticipated loss of tax revenue from the bill, which the Democratic leadership has made a rallying cry during this first session of the 110th Congress.

The bill increases the amount of income exempt from the AMT from $42,500 in 2006 to $44,350 in 2007 for individuals, and from $62,550 to $66,250 for married filers.

Treasury Secretary Henry Paulson said the late action could delay refunds to some taxpayers; the IRS had previously said that such late action would delay refunds on 38 million tax returns.

The IRS on December 21 said it would post to revised copies of the 11 tax forms impacted by the AMT legislation within 72 hours after the AMT patch is signed into law.


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