Laura McCue sent this in from www.horsesmouth.com
"Most [tax revisions] didn't improve the system, they made it more like Washington itself: complicated, unfair, cluttered with gobbledygook and loopholes designed for those with the power and influence to hire high-priced legal and tax advisers." --Ronald Reagan
Some interesting facts about 2006's gobbledygook and loopholes:
1. There is no increase in the amount you can contribute to IRAs. In 2005, clients could contribute $4,000 to their traditional and Roth IRAs. In 2006? The same $4,000.
2. The IRA catch-up does rise. In 2005, individuals over 50 could contribute an additional $500 to their IRA. In 2006, they can now contribute $1,000.
3. AMT exemptions dropped. Not that they were very high to begin with, but in 2005 the exemptions were $58,000 (joint) and $40,250 (single). In 2006, the exemptions revert to their pre-2001 levels of $45,000 (joint) and $33,750 (single). Congress is supposed to act to adjust these levels, but with AMT bringing in a larger percentage of the government's revenue, will they?
4. Some AMT personal credits no longer count. Beginning in 2006, the dependent care credit, credit for the elderly and permanently disabled, mortgage interest credit, Hope and Lifetime Learning credits, and the defined contribution first-time homebuyer credit are no longer allowed.
5. All the tax brackets grew by 3% plus--a little less than inflation.
6. No education deduction. Prior to December 2005, parents could take advantage of a $4,000 above-the-line deduction. No more.
7. The state sales tax deduction is gone.