Holly Park Homeowners Association :: HPHA

Late December 2007, Congress passed the AMT Patch intended to limit the effects of the AMT (Alternative Minimum Tax).

“For years, Congress has passed one-year patches aimed at minimizing the impact of the tax. For the 2007 tax year, a patch was passed on 12/20/2007, but only after the IRS had already designed its forms for 2007. The IRS will have to reprogram its forms to accommodate the law change, creating potential delays in income tax refunds for 2007”

The AMT was enacted by the "Tax Reform Act of 1969" as an alternative tax to ensure that the wealthiest taxpayers, even with their big deductions and loopholes, didn’t avoid paying income taxes. But because the tax was not adjusted for inflation, it has increasingly reached down into the middle class.

The AMT is calculated at the same time as your Regular Taxes using the Tax Tables. Whichever tax is greater (your Regular Taxes or the AMT), you must pay that. If the alternate method results in a higher tax, the difference between it and your standard tax bill is the AMT.

“The IRS has targeted Feb. 11 as the potential starting date for taxpayers to begin submitting the five AMT-related returns affected by the legislation”

Taxpayers using any one of the following forms will not be able to file until February 11, 2008:

• Hope and Lifetime Education Credits - Form 8863
• Residential Energy Credits - Form 5695
• Child and Dependent Care Expenses - Form 1040A Filers
• Mortgage Interest Credit - Form 8396

Read more about the AMT at the I.R.S. Website...

Read the Highlights about the 2007 Tax Changes here...

^Note: This communication is intended to provide general information about the subject matter covered or an idea that is discussed on this web site, with the understanding that HPHA is not rendering legal, accounting, or tax advice. You should consult appropriate counsel or other advisors on all matters pertaining to legal, tax, and accounting obligations and requirements.