Alternative Minimum Fuss

Like many, I've heard of the AMT - the Alternative Minimum Tax - but since it did not affect me I haven't paid much attention to it. Apparently this particular tax was made into law in the late 60's as a way to target a particular group of ultra-wealthy people who were using deductions to avoid to pay any income tax at all. The tax has not been adjusted over time and has gone from affecting the intended target to an ever-growing percentage of the American public at large.

Congress intended to take action on this issue this year, but was apparently delayed. A short term fix was created, a one year freeze on the growth of the AMT, but the forms for people who pay this tax were printed in November. Orginal reports indicated that updated versions of the 5 affected forms would not be available to taxpayers until February 11, 2008, putting a damper on some people's desire to file early. As in January early.

The AMT affected about 13.5 million American taxpayers when filing their 2006 taxes. Of those, an estimated 3-4 million are traditional early filers, the people who will be affected by the delay.

For more details on the changes and a list of affected forms, check out the AP article here and the IRS's information page here.

The IRS did recommend electronic filing as a way to increase the speed of refund processing for those affected.