HBA - Taxing Details

On May 17, President Bush signed the "Tax Increase Prevention and Reconciliation Act" (TIPRA) into law. While it's an important event for many taxpayers, it has not received the fanfare of previous tax laws, the World Cup, or Brangelina's baby.

The reason for the somewhat muted response is that Congress debated the merits of the bill in a remote, heavily-guarded resort in Angola.

Seriously, many of TIPRA's provisions simply extend existing tax law so as to prevent tax increases. One of the most significant areas it addressed (in part) is AMT. Many of our readers know that AMT was created 30 years ago to combat tax evasion by a small handful of extremely wealthy people. Since it was never indexed for inflation, the small handful of folks affected by AMT has grown to millions of middle-income taxpayers.

As a result, TIPRA raised the AMT exemption amount for 2006 to $62,550 for MFJ and $42,500 for single. Also, just for 2006, AMT can be offset by nonrefundable personal credits such as the Hope and Lifetime Learning Credits, the Adoption Credit, and the Saver's Credit. While it doesn't come close to solving the AMT problem, it does help a bit for the time being.

Stay tuned for more exciting news and updates on TIPRA. As always, if you have any questions on tax planning or the latest celebrity gossip, please call your CPA.

To ask a question, request additional information, or unsubscribe, simply reply to this message. And if you know of anyone who may be interested in "Taxing Details," don’t hesitate to pass it along.


On May 17, President Bush signed the "Tax Increase Prevention and Reconciliation Act" (TIPRA) into law. While it's an important event for many taxpayers, it has not received the fanfare of previous tax laws, the World Cup, or Brangelina's baby. The reason for the somewhat muted response is that Congress debated the merits of the bill in a remote, heavily-guarded resort in Angola. Seriously, many of TIPRA's provisions simply extend existing tax law so as to prevent tax increases. One of the most significant areas it addressed (in part) is AMT. Many of our readers know that AMT was created 30 years ago to combat tax evasion by a small handful of extremely wealthy people. Since it was never indexed for inflation, the small handful of folks affected by AMT has grown to millions of middle-income taxpayers. As a result, TIPRA raised the AMT exemption amount for 2006 to $62,550 for MFJ and $42,500 for single. Also, just for 2006, AMT can be offset by nonrefundable personal credits such as the Hope and Lifetime Learning Credits, the Adoption Credit, and the Saver's Credit. While it doesn't come close to solving the AMT problem, it does help a bit for the time being. Stay tuned for more exciting news and updates on TIPRA. As always, if you have any questions on tax planning or the latest celebrity gossip, please call your CPA.
	To ask a question, request additional information, or unsubscribe, simply reply to this message. And if you know of anyone who may be interested in "Taxing Details," don’t hesitate to pass it along.