um, so this is how capitalism works?
February 15, 2009
So I just plugged all our numbers into some of that fancy tax software, and the results are, well, enough to make me want to stop working so hard. Or at all.
The husband and I had slightly more taxable income in 2008 than 2007. For that we are grateful, especially in this time of financial distress for so many. But our owed tax is significantly more expensive in 2008 than 2007. Thanks to the AMT, 58% of our increase is owed as taxes. That’s MORE THAN HALF of our increase!
So why do I work so hard again?
9 thoughts on “um, so this is how capitalism works?”
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That sucks you guys got hit by the AMT. I’ve always been afraid of that.
Yeah, I’m hoping I fat-fingered something somewhere, but comparing our 2007 1040 to the generated 2008 1040, nothing seems too amiss.
I think we’re going to get ‘people’ this year – even if we can’t avoid paying through the nose this year, hopefully we can get some useful guidance on how to avoid it next year.
Also, it turns out that it was good that we were lazy and never adjusted our withholding; otherwise we’d have a hefty tax bill and not just a tiny return.
I’m not sure if helps you, but AMT was rolled back in the stimulus package. You can read the text of it here, searching for AMT.
http://www.house.gov/billtext/hr1_cr_jesb.pdf
Moreover, the reflection of the change to AMT in the ARRA will be updated in most/all of the tax software, at the earliest, on Wednesday, following the President signing it into law.
Oh, that is good news! I assumed the software was ‘up to date’ and, hence, knew what it was talking about. 🙂 As for the pdf you linked, if only reading tax code didn’t give me a headache shortly before inducing coma …
Ha, ain’t it a great read? Yea, those fancy tax software people are pretty anal, so I’d expect it in there within a week or so. Every year the gov’t applies an AMT fix. Last year they waited until the last minute, patching it in March.
Awesome, now I’ll keep my fingers crossed till the end of the week …
The AMT was meant to stop “rich” people from hiding all their money in tax shelters and not paying any taxes.
I don’t know about you, but I don’t consider myself “rich”, and I don’t think you do either.
Your husband and I had a long discussion about taxes during the last mancation (man + vacation). I think together, we could change the world for the better. ; )
By the time Obama has his eight years, we’d be old enough to run for President. What do you say?
Ha! Something tells me the president doesn’t get to play video games …