I suppose Congress expects a pat on the back for passing the AMT stop gap measure. They might actually deserve one if they hadn't waited until the last possible second to pass the legislation. See the IRS needs to reprogram their computers with this new AMT information, update and print all the paper forms. What this means for the tax payers is that refunds will be delayed. So much for the early bird getting the worm, you can still file early you just will have to wait up to 4 weeks longer for your money. The IRS owes that money back to us, yet because of Congress' foot dragging we have to wait. You try telling your creditors, "Gee, I can't pay right now I have to update my computer system" doesn't work does it. Why are we letting it work for the IRS?
In all fairness to the IRS they told Congress to hurry up and make the changes. They knew exactly how long it would take to update everything. The real culprit is Congress. They simply couldn't get the changes done and voted on in time. Now I know financial consultants always tell people not to pay in one penny more then they have to, but lets face it, the average American is terrified of owing the IRS so they would rather pay in more and get it back then face a big tax bill. Besides most taxpayers aren't up to the elaborate math calculations necessary to make sure you pay in the exact amount, not over or under. Nothing is more disheartening then writing out another check to the IRS in addition to what they take from each paycheck. What this means is that the Government has oodles and oodles of money to play with for an entire year.
The American public should be outraged that the Government found a way to hold onto our money for a few extra weeks. I know you are thinking 'so what? a few extra weeks big deal'. Think of all the interest they are generating on our money. Where exactly will all that extra revenue go? Can't say for sure, all I know is that it won't come back to the taxpayer, it will disappear into some mysterious government account.
Now Congress will try to smooth our ruffled feathers by pointing out that the AMT changes will save millions of Americans from owing extra money under the AMT rules. This is all well and good, but, what they really need to do is completely revamp the AMT. In theory it was a great idea, a way to make sure the super wealthy paid their fair share, except the super wealthy have myriad ways to hide their wealth-that's how they stay super wealthy. That leaves the average dual income American family or a single high wage earner stuck in AMT hell.
AMT has never been adjusted for inflation that means every year more and more taxpayers find out they are now subject to the AMT penalties. On average this leaves the taxpayer paying $2,000 extra. Goody, more money generated for the Government.
So yes, Congress should be taking steps to fix the AMT, but they should be long term fixes. Like revamping it entirely, not just pushing through quick fixes. Eventually there will be no more quick fixes left. I am not even sure the AMT is something worth fixing.
It certainly doesn't make the super rich quake in fear, all it seems to be doing is causing a huge hassle for the average American. But knowing our fearless leaders they won't think about it again-until next year. Probably late next year, when they will rush another stop gap measure through. If we aren't careful, this will become the norm.
You won't actually receive your refund until March or April even if you file in January. That really doesn't seem fair does it? But that's Government inaction for you.