<p>If you are already paying AMT, and they don’t patch it, you will pay more.</p>
<p>How much more depends on your personal situation.</p>
<p>The patch raises the exemption amount from $45,000 to an inflation-adjusted $77,000 or so. So worst case is you will be paying AMT on an extra $32,000 of income.</p>
<p>And if your income is high enough that the 26% AMT bracket is phasing out, you could potentially be paying 35% of that $32,000 in extra AMT.</p>
<p>So the absolute worst case is that you will pay about $11,000 more of they don’t patch it.</p>
<p>Well, I was watching the news tonight and the talking heads were saying a likely scenario is higher rates on higher incomes over 100 percent of their income, not just over the amount over a certain level. I had to go outside and take some deep breaths of cold air.</p>
<p>Jeez. for a second, sewhappy, I was thinking you were talking about getting taxed more than 100% of our income. The thoughts that came to my mind were, “How could they do that,” and, “Yeah, that figures.” But I get what you’re saying now.</p>
<p>I guess I might have to think of some strategies. Maybe working for no pay, but to fill up my sick leave bank only. Wonder how many people are going to get a tax divorce? Sick thought, but it could cost many, many dollars to stay married.</p>
<p>Notrichenough, do you have a large capital gain in 2012?</p>
<p>I wouldn’t watch talking heads. Their heads are usually missing brains.</p>
<p>There is nothing decided yet. The odds that people, above a certain income, are going to pay taxes at a rate above 100 percent is doubtful.</p>
<p>People making more than 250,000 are very likely to see their tax bills increase. It could be due to increases in tax rates for income above 250,000. A limit on deductions. Limits on tax free or tax deferred income. Capital gains tax rates and taxes on dividends may go up.</p>
<p>People that pay the amt are paying federal income taxes at an average rate below 28 percent. The 26 and 28 percent tax brackets are marginal tax rates. There is still income taxed at less than 26 and 28 percent even with the amt. In addition, there is 40,000 plus of income that isn’t taxed.</p>
<p>I think if people think they pay too much in taxes they should quit their jobs. Then they don’t have to worry about taxes. Of course, they will end up with a lot less money. We do
have an unemployment problem in this country. People quitting their jobs can open up spots for others.</p>
<p>“People making more than 250,000 are very likely to see their tax bills increase. It could be due to increases in tax rates for income above 250,000. A limit on deductions. Limits on tax free or tax deferred income. Capital gains tax rates and taxes on dividends may go up.”</p>
<p>Or all of that couple happen, inducing a multiple tax whammy.</p>
<p>“I think if people think they pay too much in taxes they should quit their jobs. Then they don’t have to worry about taxes. Of course, they will end up with a lot less money. We do have an unemployment problem in this country. People quitting their jobs can open up spots for others.”</p>
<p>Good thinking. Except for the fact that people still have to eat, pay their rent, and take care of their kids. Or maybe it would be preferable to just go on welfare and have everyone else just pay for them. That would open up some jobs.</p>
No. When I was laid off, I received a lump sum severance+vacation payout that was greater than I would have gotten if I had remained employed for the rest of the year. In addition, I was forced to exercise all of my vested options, including some ISOs, which are a big AMT trigger. These all withhold at statutory rates, or not at all, and it is not enough.</p>
<p>Add in unemployment, which doesn’t do withholding, and DW having a better than expected year, and we account for her by increased withholding from my paycheck, which obviously isn’t happening. I could pay estimated, but I don’t have to, so I will just write a giant check to the IRS next year.</p>
<p>
This is not correct.</p>
<p>After you exceed your $45K exclusion ($77K if patched), you start paying at 26%. Over a certain amount ($75K I think) the rate jumps to 28%. Once you get over $175K, the 26% rate starts phasing out, giving you a 35% marginal rate. You pay whichever system generates a higher tax amount.</p>
<p>So there is never income being taxed at a rate of less than 26% under AMT. And your income is higher, because you don’t get the state and local property tax deduction.</p>
<p>"One of the problems if the Bush tax cuts expire is that the marriage penalty comes back in full force.</p>
<p>That alone will cost most dual-income families thousands of dollars per year."</p>
<p>Well, I guess a strategy around that is high income women could take up dstarks idea, quit their jobs, and stay home in the kitchen. That way there would be plenty of job openings for others.</p>
<p>The lower capital gains rates still apply under AMT, but yeah, I also read dstark’s comment to imply that there was a lower-than-26% bracket for ordinary income under AMT, which there is not.</p>
<p>If AMT gets patched, the standard deduction is better for me this year, and a big chunk of additional charitable contributions would have no tax benefit. If AMT doesn’t get patched, itemizing is better, because there is no standard deduction for AMT, and every dollar of charitable contribution saves me 26 cents in tax. I sure hope we know before the end of the year which way it’s going to go, so I can make my contributions in January or December, accordingly.</p>
<p>Uhhh…there is a zero bracket under AMT. Ok…I am calling the income that is exempt from taxation a bracket. The first 44,000 or 66,000 or whatever it is…</p>
<p>The exemption can be phased out…under certain circumstances.</p>
<p>Some of you who pay AMT and are worried about the Bush tax cuts shouldn’t worry too much. You might not be affected much. You didn’t get the full tax cut if you pay AMT.</p>
<p>I am probably going to pay zero income taxes for 2012. I would love to pay taxes at a 39.6 percent rate instead of zero because that would mean I don’t have these LOSSES. I would love to have the income in 2012 to pay taxes at the highest bracket, but instead my taxable income is zero. </p>
<p>I will trade income with any of the complainers. ;)</p>
<p>The tax proposal that limits deductions, and I bet many posters supported that proposal, could lead to income tax rates above 100 percent of income. The pick your number deductible plan, pick any number, was not thought out. </p>
<p>If for example, somebody had 100,000 in income and 100,000 in deductions so they really made nothing, somebody could get a nice tax bill if deductions were limited to 25,000 for example.</p>
<p>Yet, we all know some people are proposing this wonderful plan.</p>
<p>It’s not the marginal tax rates, it is what people really pay in taxes that counts. If my real tax rate is 20 percent, and the highest tax rate is cut
to 28 percent with the elimination of deductions, and my actual tax rate
rises as a result to 25 percent, my taxes have risen even though the highest tax rate has been cut.</p>
<p>People can get really screwed if deductions are limited.</p>
<p>"It’s not the marginal tax rates, it is what people really pay in taxes that counts. If my real tax rate is 20 percent, and the highest tax rate is cut
to 28 percent with the elimination of deductions, and my actual tax rate
rises as a result to 25 percent, my taxes have risen even though the highest tax rate has been cut.</p>
<p>People can get really screwed if deductions are limited."</p>
<p>What? We actually agree on something related to taxes, can that be?
I would rather them raise tax rates than limit deductions. But I suspect they may do both, double screwing some people and raising taxes for many people who aren’t expecting it. Everyone expects they’ll tax the other guy, not them.</p>
<p>Of course, the reality is, if anyone really wanted to raise taxes on the wealthy, they would be proposing cap gains to be taxed at ordinary income. Which is how the wealthy, and truly wealthy get their income, not like most working people. Wonder why that isn’t top priority?</p>
<p>Middle and upper middle class need to start saving their money for new taxes now, as the worst thing that could happen is that taxes are not phased in gradually, but in the blink of an eye. And who has saved money for that?</p>
<p>“The tax proposal that limits deductions, and I bet many posters supported that proposal, could lead to income tax rates above 100 percent of income. The pick your number deductible plan, pick any number, was not thought out.”</p>
<p>“If for example, somebody had 100,000 in income and 100,000 in deductions so they really made nothing, somebody could get a nice tax bill if deductions were limited to 25,000 for example.”</p>
<p>So, they’d pay 28% on $75K or $21,000. That’s a tax rate of 21%. That’s not a tax rate of over 100%.</p>
<p>How did you lose money this year? All of the indexes are in the green.</p>
<p>There are circumstances now where the marginal rate can be over 100%, especially among the “working poor” - $15,000-$40,000 in income. How’s that for incentive to work?</p>
<p>
Maybe you should get a job that contributes to the economy, instead of day-trading. ;)</p>
<p>I am not financially savvy by any means. I’d like to see limit on deduction. It is straight forward and could provide a more level palying field.</p>
<p>We’re over the 250k line and not in the 1 percent but for all intents and purposes will be lumped into that despised class. We will try to keep DH in the saddle a little longer to pick up more stock grants and excess deferred retirement contributions but we will weigh it as we go. It may make more sense to just retire now. </p>
<p>No one will get my DH’s job, though. Contracting industry. Downsizing through attrition.</p>
<p>Anyone following the discussion on corporate tax rates? I think that will have most significance for employment numbers.</p>
<p>Sewhappy, I promise financially it doesn’t make sense to retire now.</p>
<p>If SS or medicare are means tested or the age to receive these benefits is increased, it may make sense to work longer.</p>
<p>Some people are focused on taxes. They should also be focused on benefit cuts. Health care costs.</p>
<p>When people retire, those that get their health insurance subsidized or in group plans may be in for a shock when they go out to the marketplace to get health insurance on their own.</p>
<p>Now there may be other reasons to retire and those reasons may trump any financial considerations.</p>
</p>