QUESTION:

H.R. 3996 Tax Increase Prevention Act of 2007

H.R. 3996 (enacted as Public Law 110-166) provides Tax Relief for individuals who would have been subjected to the alternative minimum tax (AMT).

The legislation will reduce revenues by raising the exemption amount against one's gross income for AMT purposes and by extending the rule that allows the use of nonrefundable credits against the AMT.

The changes apply to tax year 2007.

Prior to the enactment of H.E. 3996, unmarried individuals, married individuals filing joint returns, and married individuals filing seperate returns were permitted were permitted an exemption on their taxable income under the alternative minimum tax rules for 2007 of $42,500, $62,550, and $31,275 respectively.

H.R. raises those respective amounts to $44,350, $66,250, and $33,125.

Also, prior to the enactment of H.R. 3996, individuals with nonrefundable personal tax credits in 2007 would not have been able to claim such tax credits against the AMT.

However, in recent years tax payers were allowed to claim the credits against the AMT, and H.R. 3996 extends such treatment through 2007.
asked by grandpa24551, 1/20/2008
Categories: Tax Planning, Financial Planning for Retirement
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