US 2006 Tax Law Changes

All too frequently taxpayers are faced with the dilemma of tax law changes. In the US, 2006 tax law changes have been so extensive that many people find themselves confused when it comes to the tax laws. What used to be correct information even two or three years ago is now changed and not necessarily for the good. Each year it seems that something is either added or removed from the tax code, so there is little wonder that taxpayers and even professional tax preparers are becoming confused concerning what a person or business can and cannot deduct or claim.

Fortunately for the average person, the 2006 tax law changes affected mostly the upper income and corporate taxpayer. However, in 2006, a number of tax laws were changed. For one, the alternative minimum tax was raised, exemptions were raised from $3200 to $3300, but at the same time, the income level for those exemptions was lowered. The major issue that may affect many people is in 2006, new tax law changes for charitable contributions require receipts or other proof, and non-cash contributions are disallowed unless the items donated are in good or excellent condition. How this modified IRS 2006 tax law will affect organizations such as Goodwill, The Salvation Army, and others remains to be seen.

Other IRS 2006 tax law changes include provisions in the kiddie tax that limit that amount of income that are taxed at a lower rate. Likewise, the law that used to affect mostly 14 to 18 year olds has been raised to 18 years, and though the first $850 is still tax free, the second $850 is taxed at 15 per cent, but amounts over that are taxed at the same rate as the parents.

How these 2006 new tax laws are going to affect the majority of middle-class citizens will be shown in time. Unfortunately, many of the IRS 2006 tax laws have taken the direction of many others since the beginning of the decade and placed favoritism on those who have the financial ability to pay higher taxes. Still other tax law changes are likely to take place in 2007 and into 2008 as we experience the winding down of the current presidential administration. The laws change so quickly that it is often difficult for the tax accountants and tax attorneys to keep up the pace, thus the reason many people have resorted to using tax preparers, even those who have prepared their own taxes for many years. The changes are too quick for the average person to keep up, and some of the changes are very subtle.