Alternative Minimum Tax

Hoffman, W., Maloney, D., Raabe, W., & Young, J. (2013). Federal Taxation Comprehensive Volume. (36 ed.). Ohio: South-W

After the passage of the 16th Amendment, the nature and process of taxation changed many times. An author for the Virginia Law Review wrote in 1972, “Developing and maintaining an appropriate tax structure for a nation as economically complex and dynamic as the United States is a mammoth task” (Graetz, p. 1401). Because of this complexity, the nature of the Tax Code would need to be altered to keep up with what the country requires at a given time. Several significant changes have been made to the Tax Code, but none more significant than the passage of the Tax Reform Act of 1986 (TRA 86). TRA 86 was one of the most polarizing changes in tax law and where the current Code gets its name (Spilker et all., 2016, p. 2-11). It brought about more revisions than most people and businesses could keep up with, and it brought to light the deficiencies in implementing amendments to the Code, namely a disturbing lack of awareness from taxpayers of the alterations. Many businesses benefited from the changes—mostly large, well-established firms, but small mom-and-pop stores who have less stake in tax planning suffered (Scholes, Wilson, Wolfson, 1992, p.181). This negative effect would have been avoided if taxpayers had taken precautions and been aware of the impending changes in tax laws and if those changes had been communicated clearly to them.

Tax deductions are allowed to taxpayers only if specifically authorized by the Internal Revenue Code. Deductions allowable to individual taxpayers fall into four categories: trade or business expenses, expenses incurred for the production of income, losses, and personal expenses. In addition to discussing the general requirements for deductibility for each of the above types of expenses, this chapter also discusses the tax treatment of many commonly encountered expenses incurred by taxpayers, from trade or business expenses such as rent, insurance, interest, taxes, bad debts, etc. to employee business expenses (travel, transportation, etc.) to

“I love paying my income tax! This tax system is so easy to understand!” said no United States citizen, ever. No one has ever said this because it is highly unlikely that no one actually enjoys struggling with the complexity of the current income tax system in the United States. The concept of contributing to the good of the community, county, state, and nation through taxation is not new, nor is it generally opposed by American citizens. Most tax paying citizens do not take issue with paying for police and fire protection, roads, and national security with tax dollars. However, what they do take issue with is the fact that the current tax code is a complicated nightmare. It is a bureaucratic mess of rules, regulations, and perhaps even infringements upon personal rights. Because of the complexity of the current tax code, the United States should implement a flat tax system for personal and corporate income tax to ensure consistent and fair taxation and to render the tax code as more user-friendly.

1) Add exemption amounts and the standard deduction (if deducted it for regular tax purposes) back to regular taxable income in determining AMTI.

Although taxes are inevitable, the way states tax their citizen may be vastly different. I compared two states in order to understand the contrast and comparison between their state’s tax system. I chose to research the tax systems of Oregon and Florida. Oregon and Florida are two states that are distinct from each other not only in location but in their state’s tax system as well. Oregon is heavily dependent on a personal income tax, however, Oregon is not dependent on sales tax by all means. On the other hand, Florida is highly reliant on sales tax, however, Florida holds no need for a tax on personal income. Ultimately, these two states are gaining enough taxes for them to continue to survive. This does not mean, however, that both

Another issue with the tax code of the United States is the inability to separate

A recent national survey conducted by the Pew Research Center on April 7, 2013 found that 56% of Americans have a negative reaction towards income taxes. For this reason, most presidential candidates of both the Republican and Democratic Party, such as Ben Carson, Donald Trump, Hillary Clinton and Bernie Sanders, maintain a fixed position on the way they think the current tax code should change. With all the issues and criticism the current American tax code faces there is an ongoing debated on how it should be dealt with. This Paper will explore all four, of the previously stated candidates’ tax plans

Revenue generated through tax receipts ideally should exceed annual costs on various government operations. Moreover, the economic considerations involving amendment of Internal Revenue Codes for various depreciation deductions for purchase of business property and research/development deductions credits1. The second consideration, referred to, as social consideration give tax benefits to the employers encouraging health insurance and deduction for charitable contributions by employees as well as private companies. The equity considerations enable individuals or corporations to avoid the effect of double taxation on their taxable income. This could be necessarily ensured by deducting state and local taxes from Gross Income. The credit or deduction for certain foreign taxes and deductions for dividend received by corporations to avoid triple taxation. The

What are some provisions of tax law that you have found to be particularly beneficial for you and your family?

For corporations and individual tax filers alike, filing one’s taxes is no small feat due to the tax code’s complexity and volume. The number of laws, exclusions, exemptions, credits, taxes, deductions, and revisions are more than any one person

Recently, the public and the government of the United States have been at odds with each other over many enforced fiscal policies. Whether one believes that the answer to the nation’s economical crisis is an increase taxation of the wealthy one percent, or the leveling of the tax rate, every concerned citizen is searching for a solution. Typically, in American politics, the liberal side of the political scale believes that the wealthy should contribute more to the nation’s tax income. This idea centers on the notion that a lower tax rate on the poor will ease their burden and allow them to purchase more products; meanwhile, the rich will support the tax deficit from the lower classes with their own vast amounts of wealth. Opposite liberals, there is the conservatives. They will typically advocate for a tax break for business owners (wealthy or otherwise) or a more even tax rate across the socioeconomic classes. This outlook is supported by the idea that if the upper one percent of the U.S.A. is flourishing, it will produce more jobs and opportunity for the middle and lower class. Regardless of who is consulted, many people in today’s more liberal society will agree with higher taxation of the rich. However, there is a growing number of people in the United States that believe that the answer to solving the economic crisis is to abolish the current income tax and replace it with a national sales tax. By installing a national

By and large, every research study’s purpose assists the persons undertaking it appraise its significance in the light of individual values. Ideally, the statement spelling out the purpose should include not only the study's eventual purpose but also its immediate purpose. As noted earlier, there are various widespread contestations arising from differing appreciations of the basics of standard deductions. As a general rule, each of the deductions is seen as rising each succeeding year. Even then, in some cases, the deductions reduce in succeeding years. Consequently, the present study’s purpose is to use credible, actual data in determining whether for a fact, federal income tax-related standard deductions rise every twelve months

The alternative minimum tax (AMT) is an income tax levied by the federal government on corporations and individuals. Congress enacted the AMT as an alternate form of income taxation to ensure that taxpayers with substantial economic income cannot use exclusions, deductions, and credits to avoid a significant part of their tax liability. Because corporations are allowed to reduce their income tax liability, (sometimes to zero) with exclusions, deductions and credits; IRC Section 55 requires many corporations to add back some of these deductions and credits and pay tax on the recalculated amount.

The United States tax system is in complete disarray. Republicans and Democrats agree that the current tax code is complex, unfair, and costly. The income tax system is so complex; the IRS publishes 480 tax forms and 280 forms to explain the 480 forms (Armey 1). The main reason the tax system is so complex is because of the special preferences such as deductions and tax credits. Complexity in the current tax system forces Americans to spend 5.4 billion hours complying with the tax code, which is more time than it takes to manufacture every car, truck and van produced in the United States (Armey 1). Time is not the only thing that is lost with the current tax system; Americans also lose