How did Congress change the AMT for 2007?
At the last minute, Congress approved a long-expected “patch” for the AMT. The patch increases the AMT exemption, which is basically a standard deduction for taxpayers hit by the alternative minimum tax. Without the patch, the 2007 exemptions would have fallen from “patched” 2006 levels—$42,500 for single taxpayers, for example, and $62,550 for married taxpayers filing jointly—to pre-patch levels of $33,750 for singles and $45,000 for married couples. The stunted exemptions would have pushed an estimated 19 or 20 million taxpayers into the grasp of the AMT—boosting their tax bills by an average of more than $2,000 each. As a group, the taxpayers would have paid an extra $50 billion in taxes. The patch approved by Congress and signed into law by President Bush, prevents that from happening.
