Quote:
Originally Posted by Schneed10
As for the bolded part, I added it as income because it's a tax return, money they get back from the government every year. If not for AMT, this couple would get back more than $35K each year in tax returns. With AMT, they only get back $21K.
In reality, nobody gets a tax return this big because people claim more than 0 on their W-2 at work, hence less tax is taken out from their paycheck. But that's a zero-sum affect in this example. If this couple were doing that, their 61K income tax liability would be reduced by the same amount in which their tax return went down.
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I'll be the first to admit that I am awful with taxes, but I'm trying to understand the chart, because I think it's a useful framework for this discussion. Are you saying that the total federal income tax liability for a couple making $250k is about $40k? I'm seeing a $61k federal tax expense and a $21k federal tax return.