April 15th is less than a week away, and that means my busy season is over. On the tax front, things I have learned:
- I think the Michigan income tax credit for property taxes should be non-taxable as income on the federal return in subsequent years. I have yet to find the definitive word on the taxability of state income tax credits, but I shall post the results once I find them.
- Tax cuts are meaningless unless the Alternative Minimum Tax (AMT) is either adjusted for inflation and the new tax structure or repealed. I have seen a lot of people who are of moderate income get dinged with AMT when in prior years they would not qualify. The concept of AMT was to ensure that high income earners paid their 'fair share'. But since the tax rate or brackets have not been changed or indexed in years, it is ensnaring a larger and larger amount of middle income families. The worse part is that those people who live in states that have had large state income or property tax increases are getting the worst of it. Thus on one level, the Bush tax cuts are a mirage because they give with Form 1040 (regular tax) and take away on Form 6251 (AMT). In Canada, they get you by changing all these deductions to credits that apply only at the lowest rate (and not the effective rate).
Those are my observations. I have been keeping up on my reading, and will be posting on Adscam once the 15th is over and the requisite festivities related to them. If anybody wants a primer on AMT, my esteemed colleague tax beaner will post for all of you.