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Congress Seeks Alternative Minimum Tax Reform

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By Admin on December 12, 2007 9:50 AM

Congress is attempting to work out a bill that would eliminate payment of the alternative minimum tax (AMT) by millions of Americans in 2008, according to a report from National Public Radio (NPR). The NPR story states that "if Congress doesn't pass a fix soon, the AMT could hit 20 million more taxpayers than it did last year, and millions of others could have their refunds delayed." Because tax laws give preferential treatment to certain income, and allow special deductions and credits for certain expenses, the alternative minimum tax (AMT) tries to ensure that anyone who benefits from these tax advantages pays at least a minimum amount of tax. The AMT is a separately figured tax that eliminates many deductions and credits, thus increasing tax liability for an individual who would otherwise pay less tax.