So far, the House of Representatives passed H.R. 3996, which includes an AMT “patch”. If this bill for an AMT “patch” isn’t enacted, millions more middle class taxpayers will be subject to the AMT. So we’re waiting to see what the Senate will do with this legislation, and whether it will go to the President.

Although tax increases are included in the bill to pay for the revenue loss, President Bush has indicated that if passed by the Senate, he would veto legislation which he views as a tax hike. However, if this legislation is not passed, many middle class taxpayers will be denied many of the common deductions they take for granted, causing a hidden “stealth” tax. So although Bush has pushed and praised his tax cuts, many ordinary middle-class taxpayers will not get them anyway, due to the AMT. By the way, many Bush critics and even pro-Bush tax experts are saying this was all by design during the first election, but that’s a topic for another article.

So what to do in the meantime? Well, there really isn’t much for us to do.

One thing is for sure, however. You should expect the late legislation to cause more errors and delays for 2007 tax returns and refunds. So brace yourself, and make sure your tax preparer or tax software is current to reflect these last minute changes.