Working on the taxes, I'm reading through the 1040 Instruction Book.
For 2009, a family (two parents, and one or more children) is poor enough to claim the Earned Income Credit if their income is $43,415 or less.
For 2009, a family is rich enough to fill out forms to determine their Alternative Minimum Tax (aka, extra tax on the rich folks because they're rich enough to pay it) if their adjusted gross income is $45,000 or more.
Do these numbers look funny to anybody besides me???
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What a difference a thousand dollars makes!
ReplyDeleteWhat the ---? The AMT kicks in at $45k?
ReplyDeleteWe're not going to have any entrepreneurs, inventors or small businesses left. We're taxing them to death!
I don't know if you have to start paying AMT at $45K, or maybe you have to only in certain instances (like depending on whether it's business income or interest income or maybe something else like that). I didn't go hunt up the forms and instructions for filling it out, seeing as how it doesn't apply to us. But I did see that at $45K AGI, you have to fill out the forms to see if & how much AMT you owe. And I find that to be nearly unbelievable. I mean, how can you be soooo POOR to need govt handouts, but if you earn $1600 more you constitute the ultra-RICH (because that WAS who the AMT was set up for, right?)?
ReplyDeleteIf you were playing Price Is Right they'd give you a bigger window to guess the right price of the car than the window the govt is giving you to hit "middle class."
huh? I guess I should pray that dh doesn't get a raise!
ReplyDeleteThere is a place on the irs.gov site that helps you determine if you need to look into this option. I checked it out because you scared me...I helped a couple do there own taxes for the first time yesterday and I thought I had steered them wrong!
ReplyDeletehttp://tinyurl.com/bybvl9
It is called an AMT Assistant. It was a little complicated, but truly took about 10 minutes.
Sorry about the scare, Lauri. This year a couple who makes less than $69K doesn't even have to look at the possibility of AMT. It's for the 2009 taxes that the threshold changes so drastically. My memory seems to recall that the AMT used to kick in with a number that had six digits, not five. But since it never applied to us, I didn't pay much attention. If I'm right, though, the threshold has already dropped a lot. But a 34% drop in the threshold in one year just seems like one big fast change, throwing a LOT of people into a higher income bracket all at once.
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