Congress has been dawdling all year on a tax bill, and as a result, millions of early filers could have to wait extra weeks for refunds that averaged last year at $2,291.
The Internal Revenue Service is looking hard at delaying the start of its filing season, set to kick off on Jan. 14, if Congress fails to pass legislation in the next two weeks. At issue is how to handle what could be a dramatic increase in the number of people facing a higher alternative minimum tax.
What it boils down to, is –approximately half of taxpayers with adjusted gross incomes in the $75,000-$100,000 range will be affected by the “Alternative Minimum Tax” this year; which is a huge tax increase.
The alternative minimum tax was passed in 1969 and was aimed at about 155 very wealthy families who used deductions to avoid paying any federal income tax. The AMT disallows certain deductions and credits. It was not adjusted for inflation; as a result, over the years it has hit a growing number of middle-income taxpayers.
More than 4 million were subject to it in the 2006 tax year, and that could soar to 25 million this year without congressional action.
We just need to go to the FAIRTAX and stop monkeying around with all of this.