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    #16
    I'm actually looking forward to the 25% pass-through rules regarding business income. LOL

    You are all seasoned tax pros - can you all see the "simplification" that will evolve as a result of this provision? This will make Doug's AMT and uniform definition of child seem like child play.

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      #17
      Originally posted by New York Enrolled Agent View Post
      I'm actually looking forward to the 25% pass-through rules regarding business income. LOL
      You are all seasoned tax pros - can you all see the "simplification" that will evolve as a result of this provision? This will make Doug's AMT and uniform definition of child seem like child play.
      I need to read over the proposed changes, but surely they mean this 25% is a "cap?" A lot of taxpayers don't pay that amount when their small businesses are factored into the normal tax return 1040.

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        #18
        Originally posted by dtlee View Post
        While the Alternative Minimum Tax is a separate tax system and really does compute the taxes two different ways, it is administered as an add-on tax on Form 6251 (and would likely be easier to understand if it were computed as a separate tax than as a bunch of adjustments). How many taxpayers even understand this?
        This is so true, and so (deliberately?) under-reported. The AMT is already a much more simple tax system, and it seems they are borrowing from it - high standard deduction (which AMT calls an "exemption"), no personal exemption deductions, only TWO brackets, and limited itemized deductions. Oh, and while we're talking complexity, how about MACRS, including bonus, Sec 179, etc? That is far more complicated than AOC, and usually involves much larger dollar amounts.

        Guess what? AMT is much more simple when it comes to depreciation, too.

        With only a very few tweeks to the tax rates and brackets, AMT would be a much better choice as the primary tax system for many reasons, not least of which is that everyone is already subject to AMT, so there should be few if any surprises.
        "You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard

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          #19
          Originally posted by Burke View Post
          I need to read over the proposed changes, but surely they mean this 25% is a "cap?" A lot of taxpayers don't pay that amount when their small businesses are factored into the normal tax return 1040.
          Yes. I'm sure it has to do with the optics of giving big (C corp) business a reduced rate without also giving "small" (S corp) a reduced rate also. They say it's so they will have more money to invest and expand. Of course we all know if the goal is to keep the money in the business for growth, they could just choose C corp status, but try explaining that to the populace.

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