not reported to the IRS. Although the
interest is non taxable, it can be a
factor
in computing the alternative minimum
tax and the taxation of social security.
Speaking of the alternative minimum
tax, many of our clients have seen
the impact of the alternative minimum
tax (AMT) this last year, where your
actual tax is lower but the AMT
comes into play to increase your tax.
The alternative minimum tax was
originally targeted at only a few of the
wealthier tax payers, but today the
tax hits millions of taxpayers,
including the middle class. AMT is
not indexed to inflation, while the
regular income tax is. So inflation
makes the AMT more expensive
compared to the regular tax bill every
year, pushing more people into the
AMT.
AMT income is computed by taking
the taxable income shown on your
return and adding back items that
are used to reduce tax under regular
rules. There are also base levels of
AMT income where the tax does not
apply and then a phase out amount
at higher levels where the exemption
does not apply.
State and local sales taxes, capital
gains and dividends and
miscellaneous itemized deductions all
play a role in creating AMT.
The exempt amounts are being
adjusted in the new tax bill and we will
follow up in our fall newsletter.
Thank you again for all your support
and referrals. The best compliment
you can give us is by referring to us
new clients.
interest is non taxable, it can be a
factor
in computing the alternative minimum
tax and the taxation of social security.
Speaking of the alternative minimum
tax, many of our clients have seen
the impact of the alternative minimum
tax (AMT) this last year, where your
actual tax is lower but the AMT
comes into play to increase your tax.
The alternative minimum tax was
originally targeted at only a few of the
wealthier tax payers, but today the
tax hits millions of taxpayers,
including the middle class. AMT is
not indexed to inflation, while the
regular income tax is. So inflation
makes the AMT more expensive
compared to the regular tax bill every
year, pushing more people into the
AMT.
AMT income is computed by taking
the taxable income shown on your
return and adding back items that
are used to reduce tax under regular
rules. There are also base levels of
AMT income where the tax does not
apply and then a phase out amount
at higher levels where the exemption
does not apply.
State and local sales taxes, capital
gains and dividends and
miscellaneous itemized deductions all
play a role in creating AMT.
The exempt amounts are being
adjusted in the new tax bill and we will
follow up in our fall newsletter.
Thank you again for all your support
and referrals. The best compliment
you can give us is by referring to us
new clients.
| JUNE 2006 NEWSLETTER |
| Completax Planning, Inc. |
| 1100 Lincoln Avenue Suite 104 Napa, CA 94558 707-257-3995 800-244-3995 707-257-1306 fax |
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This newsletter is going out a little later
than usual due to some changes going
on here at Completax and vacation
times.
To begin, Judie has decided to retire.
After 25 plus years with Completax she
has decided to take time to be with her
husband and family. While she is still
available for consulting and continuity
Terry and Alisha will be handling the
day to day business.
Dona has also decided to take more
time to be her husband, daughters and
grandchildren. Although she plans on
continuing to work tax season, she will
be greatly reducing her hours during
the off season.
We will be hiring at least one new
person and hopefully will be able to
introduce them to you in our fall
newsletter.
With this first newsletter is a reminder to
each that pays estimates to pay in their
second estimated tax payment by June
15th. Would you please also make a
note of the check number, date and
amount paid and put it with your 2006
tax papers. This will help us when
preparing your 2006 tax return.
Tax changes are happening at the
same time we are preparing this
newsletter and rather than commenting
specifically we would rather wait until all
is passed and we can read the “fine
print.”
Interesting to note however, is that tax-
exempt interest will now be required to
be reported to the IRS. Up until 2005
tax-exempt interest was reported on
your year end brokerages reports but
than usual due to some changes going
on here at Completax and vacation
times.
To begin, Judie has decided to retire.
After 25 plus years with Completax she
has decided to take time to be with her
husband and family. While she is still
available for consulting and continuity
Terry and Alisha will be handling the
day to day business.
Dona has also decided to take more
time to be her husband, daughters and
grandchildren. Although she plans on
continuing to work tax season, she will
be greatly reducing her hours during
the off season.
We will be hiring at least one new
person and hopefully will be able to
introduce them to you in our fall
newsletter.
With this first newsletter is a reminder to
each that pays estimates to pay in their
second estimated tax payment by June
15th. Would you please also make a
note of the check number, date and
amount paid and put it with your 2006
tax papers. This will help us when
preparing your 2006 tax return.
Tax changes are happening at the
same time we are preparing this
newsletter and rather than commenting
specifically we would rather wait until all
is passed and we can read the “fine
print.”
Interesting to note however, is that tax-
exempt interest will now be required to
be reported to the IRS. Up until 2005
tax-exempt interest was reported on
your year end brokerages reports but