Taxpayers May Save Money for 2007 Tax Season

Middle-class taxpayers may be spared higher tax bills for the 2007 tax season. This is due to a plan recently passed by Congress that fixes the Alternative Minimum Tax, which is a tax created in 1969 to prevent the wealthy investors that try to avoid paying taxes all together. Due to a failure to take into account inflation, this tax has been hitting middle-class taxpayers the hardest. Without the fix by Congress, some 25 million filers would have had to pay the tax on their 2007 income, up from four million who paid it on 2006 income. The measure would increase slightly the amount of income that is exempt from the alternative tax. For individuals, that means the exempt amount increases to $44,350 in 2007 from $42,500 in 2006. For married couples, the exemption amount climbs to $66,250 from $62,550. Lawmakers were late passing this plan, and this late action may create delays in refunds for almost 38 million taxpayers. To read more, got to http://www.irs.gov/newsroom/article/0,,id=176605,00.html