Comments on: 2009 AMT Tax Brackets

By: JK

JK — Tue, 14 Apr 2009 17:52:21 +0000

RobertSeattle-The Marriage Penalty is $3,244 in the situation you presented not $198.
I agree with Shawn. The reason people are upset is that if you live together you would pay $3,000 less in taxes than if married.

By: shawn

shawn — Thu, 12 Mar 2009 17:38:07 +0000

Many people with pooled/shared expenses are taxed at the "single" rate (e.g., roommates, unmarried couples living together). They are, if you will, "richer" than if they lived alone. There is no reason married individuals should be treated differently (and I'm single).

The marriage penalty is significant for most couples and most tax levels. But if the cost is small, as some people claim, then why complicate the tax laws by having different rates based on marital status? If outcome A is about the same as outcome B, but A is simple and B is complex, why impose B?

By: heho

heho — Wed, 11 Mar 2009 19:20:29 +0000

Married couple have pooled expenses, like a house. Their housing cost are not double of what singles have. So with combined income and pooled expenses, the feel rich factor is more. I don't see why few extra hundered dollars are considered marriage penalty.

By: SJ

SJ — Tue, 10 Mar 2009 16:20:33 +0000

Interesting… wow did not know the marriage penalty was that large;
So AMT includes all forms of income? Also did not know that haha…

By: TFB

TFB — Tue, 10 Mar 2009 16:17:17 +0000

Random Poster – I'm not sure if you are asking mechanically why or logically why. Mechanically, when you are in AMT, you are given an AMT exemption amount. As your income goes up, you start to lose a part of that exemption amount. Losing the exemption makes your marginal tax rate higher. At $433,801/$299,301, you exhaust all the exemption. There's nothing to lose any more. Then your tax rate drops down. Logically why? I don't know. Congress made the law that way.

By: RobertSeattle

RobertSeattle — Tue, 10 Mar 2009 15:34:28 +0000

I'm no accountant, but Income of 80K, Single, no deductions, I calculate a Federal Income Tax $14,000. Income of 160K, Married filing joint, no deductions, I calcualte Federal Income Tax of $28,198 so there is a $198 marriage penalty in these apple-to-apple scenarios. Interesting.

By: Random Poster

Random Poster — Tue, 10 Mar 2009 14:39:45 +0000

Maybe I'm missing something, but why is the AMT tax bracket for those earning more than $433,801 / $299,301 (married filing jointly / single or head of household) substantially *lower* than those earning less?

I know in that in your 2008 post on the subject, you state that "For people who are outside of the top phase-out range, they may not pay AMT any more. Their regular tax bracket may be higher than their AMT bracket."

Well, that may be, but doesn't that simply perpetuate the reach of the AMT on the middle class, while allowing the truly rich to pay less taxes? And isn't that completely contrary to what the AMT is/was intended to do?