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What Is Alternative Minimum Tax?

If you make more than $37,225 you could be hit by the Alternative Minimum Tax

The Alternative Minimum Tax (AMT) is a parallel system of income tax that makes sure wealthy taxpayers pay at least a minimum amount of tax, primarily by limiting the benefits available from deductions.

You could get hit by the AMT if an adjusted calculation of your taxable income lies beyond a certain threshold, called an exemption. If your income is above the exemption, you must pay either the normal income tax or the Alternative Minimum Tax, whichever is greater.

For 2011 taxes, the AMT exemption levels are $48,450 for single filers and heads of household, $74,450 for married couples filing jointly, and $37,225 for married taxpayers filing separately.

For the early birds already looking ahead to next year, the AMT exemption levels for 2012 taxes are $33,750, $45,000, and $22,500 respectively. Continue reading “What Is Alternative Minimum Tax?”

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Volunteer to Give Federal Income Tax Return Help to Disadvantaged Taxpayers

You can help low-income people in your local community get their full refund when they file taxes for 2011. Find out how!

As the season to file 2011 taxes inches ever closer, most people are preoccupied with getting their own financial house in order. But even in the tax world, Thanksgiving can be a great time of year to give back.

For instance, did you know that although it is often portrayed as the big bad wolf of personal finance the IRS in fact gets millions of disadvantaged people free income tax help every year through its Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs?

IRS volunteers assist low-to-moderate income taxpayers, senior citizens, people with disabilities, and non-English speakers who all make less than $50,000 and often suffer significant financial hardship.

As the vast majority of these disadvantaged citizens are due a refund, helping them file can get them money that could have a significant positive impact on their lives. In short, it’s a worthy cause. Continue reading “Volunteer to Give Federal Income Tax Return Help to Disadvantaged Taxpayers”

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The IRS commissioner has a vision. No space aliens or fluffy unicorns involved.

Doug Schulman opens the aperture wide on the future of the tax system.

IRS commissioner Doug Schulman’s annual speech at the National Press Club a week ago was substantively bolder than last year’s somewhat defensive plea on behalf of the IRS’s commitment to service as opposed to mere enforcement. This time around, he proposed no less than to, in his words, “open the aperture wide” and offer a view of our quickly evolving tax system that “takes us to its very horizon”.

The commissioner was quick to point out that he did not intend to peddle in the kind of science fiction that would befit a Worlds of Tomorrow anthology but instead to present a vision of the future grounded in the recent developments in tax processing that modern technology has made possible. It was an engaging performance, bolstered by a challenging proposal that, we suspect, will not escape controversy.

The goal of the IRS in Schulman’s take is to move beyond what he calls the “looking back” business model which, according to the commissioner, has governed the agency’s operations since its creation during the Civil War, above all when it deals with matters of tax compliance. Continue reading “The IRS commissioner has a vision. No space aliens or fluffy unicorns involved.”