how to maintain our tax bracket

[MonkeyMama]

I

If MonkeyMama's worried about it in a 15% bracket I'm starting to get worried myself. Unless of course she should be in a much higher bracket but due to deductions she dropped down to that. MoneyMama?

Yes, if congress doesn't do the quick fix this year I would be worried... But they will most likely.

I tell my dh every year no point for him to work until they fix it - last year they took until June or something to pass the quick fix - who knows how long they will take this year...

I should have said hits 2-income families very heavily - obviously I guess - since means more income. Add that to the 2-income trap.

[kv968]

I heard about the stock options one...

I heard a few key deductions also trigger it. Is mortgage interest still deductable under AMT?

I believe mortgage interest is still allowed but I don't think you can deduct home-equity loan interest unless it's used for home improvements. Someone please correct me if I'm wrong.

[MonkeyMama]

I heard about the stock options one...

I heard a few key deductions also trigger it. Is mortgage interest still deductable under AMT?

mortgage interest is (phew) but not the home equity portion. If you borrow up to $100k against your home, under regular tax, it is deductible - equity interest.

Under AMT, only the part used to purchase a home is deductible, equity portion is not. The simplified answer...

[MonkeyMama]

I believe mortgage interest is still allowed but I don't think you can deduct home-equity loan interest unless it's used for home improvements. Someone please correct me if I'm wrong.

I think you are right - home improvements okay.

[MonkeyMama]

Me and my big mouth - sorry to hijack the thread. I have been meaning to do either an article or blog on AMT - most people have never really heard of it, and well, it is a big cause of mine - to educate people. We need more people outraged now than before they get blindsided one year buy this surprise. I am more worried about 2010 than today, but the more we complain to congress now the more likely it will get fixed.

Stock options is another huge AMT issue which has never really been fixed either.

AMT was originally a tax on the extremely wealthy, so they could not avoid taxes, but has not been indexed for inflation and is quickly hitting the non-wealthy. IT is greatly magnified by the Bush Tax Cuts,mostly because the gap between the regular tax and AMT has widened considerably. Before bush Tax cuts, my taxes would not be nearly so LOW as they are now - just makes it that much more shocking I guess...

[jIM_Ohio]

I'd rather have a tax problem than an income problem... so you won't here me complain about taxes.

That being said, I will try to find a way to avoid as much taxes as legally possible.

[kv968]

I'd rather have a tax problem than an income problem... so you won't here me complain about taxes.

That being said, I will try to find a way to avoid as much taxes as legally possible.

I'll second those thoughts

[creditcardfree]

Items such as health insurance premiums, 401k contributions, health and dependent care spending accounts that are deducted before taxes on your paycheck all reduce your taxable income. The reduction is reflected on your w2 in Box 1.