Tax Return Time

The alternative minimum tax (or AMT) is an extra tax some people have to pay on top of the regular income tax. The original idea behind this tax was to prevent people with very high incomes from using special tax benefits to pay little or no tax. But for various reasons the AMT reaches more people each year, including some people who don't have very high income and some people who don't have lots of special tax benefits. Congress is studying ways to correct this problem, but until it does, almost anyone is a potential target for this tax.
The name comes from the way the tax works. The AMT provides an alternative set of rules for calculating your income tax. In theory these rules determine minimum amount of tax that someone with your income should be required to pay. If you're already paying at least that much because of the "regular" income tax, you don't have to pay AMT. But if your regular tax falls below this minimum, you have to make up the difference by paying alternative minimum tax.
 
Terry_Lasater said:
I hear ya! I'll be paying much more unless I can do the same.
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I hear that (again)! Thank goodness for a killer CPA... I don't ever worry about getting anything back, just as long as I don't owe anything.

Writeoffs are fun :)
 
John_Hudson said:
Congress is studying ways to correct this problem
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You should be saying this with a bit of sarcasm! :laugh:

Oh, when the DotCom bomb went off there were lots of people hit really hard by the AMT. If they had exercised their incentive stock options but then their company went belly up, they were still hit with the potential profit of the options because of AMT. So, all those poor souls that were given hundreds of thousands of options priced at almost nothing, then exercised when the stock was on the DotCom rocket, ended up having tax bills of hundreds of thousands of dollars.

Ouch.
 
This is the first year I'm not getting a return. I was expecting to get some moolah, instead I get to give them nearly $500. Ouch.

($500 means a lot to a college kid, it's the difference between sandwiches and ramen noodles for the next 6 months.)
 
Damn...and I thought us *poor white trash* would be getting a break on taxes. Seems even the lower income peeps are getting the Shaft. I love this country!! Gas, Taxes, and Death!! The only sure things!! ~reservoir~
 
True true true

Rich and Poor gap gets wider and wider. WTF is Middle Class anyway? It means I have just enough to get by; but god forbid an emergency.
 
Tax refunds are nearly a thing of the past, ancient history down here. GST (General Services Tax) means we pay 10% on every thing we buy or have done, Plumber, accountant, Funeral Director etc etc, all on top of income tax & excise on fuel. Petrol now $1.20/litre. How many litres to a US gallon?
 
About 3.5 L to a US Gallon.

I can only speak for myself, but I don't find the economy/taxes thing that bad. We take care of a family of 4 on 34K a year (about 10K of taxable income). WIth that we have a nice house, and 2 relatively new vehicles. I will grant you that these circumstances are the reward of a decade or so of responsible financial decisions, not necessarily by me :).

As far as our taxes go, we get money back every year because we still only take 2 deductions on my wife's W-4. I realize that her check would be a little bigger if we took the 4 we are entitled to, but we like getting the bigger payoff every year. It's easier to spend small amounts of money irresponsibly.
 
Tax advice,,$10,000 return is way too much. That's like $200 a week you could have every week for 52 weeks. Why let the feds keep that much money interest free? It's better than paying $10,000 I guess, but you should stick some in a tax shelter,,a 401k or something.....

I had to pay $123.00 this year. My oldest kid turned 17 so I lost the child tax credit.
 
In theory that sounds good, not letting the feds use your money all year. But it sure as hell must be nice getting a check for over ten grand right now. I always owe the suckers.
 
Zim said:
Tax advice,,$10,000 return is way too much. That's like $200 a week you could have every week for 52 weeks. Why let the feds keep that much money interest free? It's better than paying $10,000 I guess, but you should stick some in a tax shelter,,a 401k or something.....

I had to pay $123.00 this year. My oldest kid turned 17 so I lost the child tax credit.
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It's all about knowing your limitations. If I knew I was going to put that money away, I would do it. But I wouldn't. I would spend it on dinner at Chili's, buying some DVD's and crap like that.
 
On the subject of taxes, I could write a doctorate theses. Of course it helps that I live in Canada, the land of tax on tax on tax.

Forget 10% GST in Australia, we have 7% federal GST plus most provinces about 8% Provincial Sales tax. But sales tax doesn't bother me nearly as much as income tax - that's a real rip-off. Doesn't matter if I am a responsible consumer, I still get hit with the same tax as my neighbor who is a spendthrift...

So, here's my story:

I incorporated a small business when I first started IT consulting back in 1994. Based on my accountant's advice, my wife and I were 'subcontractors' to the corporation, which meant we had to collect and pay the GST to the government, but the corporation could claim it back. Because of small difference in the rates, we could save extra $500 each on taxes a year.

Then in 2000, the accountant screwed up and filed something called T4 with the govt., basically saying we were employees of the company (rather than subcontractors). That raised a red flag, and the corporation got slapped with a $3500 fine for not withholding income taxes every month throughout the year. We fired the accountant and hired a new one, whom we paid about $5000 for researching the situation and preparation of a petition to a 'fairness committee', arguing that we had already paid the taxes (on time) as 'self-employed' individuals, and therefore shouldn't be subject to any fines.

I don't have to tell anyone that their response was basically '**** you', we already have your money. Since our company already paid the GST, and were due a refund, the government simply took the $3500 out of the refund for the year.

What added insult to the injury is the letter they sent us:

We could appeal this decision at a federal court, but we were advised that the court's decision would have no power to reverse the fine, only to review the due process by the minister of finance.

Basically, the tax people are above the law. You can appeal their decision, but the court has no power to reverse it? WTF?

At that point, I was over $8000 in the hole, and I was not ready to spend any more of my hard-earned cash on the issue, more accountants, lawyers, lost income because of court dates, etc... I moved on.

Since then, we pay taxes, every month like the morons, regardless when (if) we get paid by our clients. The worst time is right after we take some time off (even two weeks). We still have to pay the deductions, but it can take two months before I see a check from a client.

Governments suck. :thumbdown

Oh, that feels good! I feel genuinely sorry if you folks have read the whole thing...
 
reservoir said:
Gas, Taxes, and Death!! The only sure things!!
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Gas: Can ride a bike or walk.
Taxes: Can ride a bike, or run away from the IRS.
Death: Can ride ... DAMN, I guess I can't avoid this one. But hey, I could use it to avoid gas and taxes! :laugh:
 
I beleive in Taxes; but the level at which we are taxed is out of control and just get's worse each generation. Taxes, Insurance, inflation; how the hell can we make a damn living?

There will be another Tea Party I am sure in our lifetime.
 
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