Your chart expired in 2006.
I know they say it’s a projection to 2010, BUT that assumes that the 2006 law continues to be ‘patched’ with COLAs each year.
Without the current-year ‘patch’ that was in the “passed but vetoed” bill this month the numbers jump big-time:
The exempted income for a married couple drops from ~$58K to ~$40K, and the rate applied is 26-28%.
That means an *additional* tax liability of ~$4680 to $5040. for 2007 alone, with no increase in their household income.
And you DO know that the IRS has been steadily eliminating the itemized deductions you can still claim on the AMT form calculations, right?
No deduction for Standard vs Itemized, none for any mortgage interest paid for refis above original amount vs $100K in regular taxes, none for State taxes paid, none for property taxes paid, none for State disability insurance paid, none for extraordinary medical expenses paid, and the big kicker for families with more than a few kids is no deduction for the personal exemptions from income.
Of course, if you are lucky enough to have Capital Gains with the lowered tax rate, that’s great, right?
Except the IRS ADDS the dollars to your income for AMT purposes FIRST, then lets you run the numbers, then you use the lower % for the CG portion- net math result is the CG money pushes you into owing AMT almost every time.
They wanted to eliminate your mortgage interest altogether in 2006, and ran into a buzzsaw of political resistance, and a good thing too:
If an average family deducts 7500.00 in mortgage interest a year, that is $7500.00 higher income for AMT purposes, and you CAN’T not pay it.
This is like the grim reaper shadowing many families just going about their business, with no idea it is looming over them waiting to strike.