posted on:  5/3/2006         revised: 3/6/2010

The Tax Increase Prevention and Reconciliation Act (TIPRA, H.R. 4297) or some close reconciled version of the proposal, seems almost certain to become law in the very near future. At first glance, two groups of people should begin thinking about taking advantage of this immediately:

1) Those in the $150,000 to $400,000 total household income range who were affected by the Alternate Minimum Tax in 2005 will benefit from some relief of the indexing provisions.  The allowance is an extra $20,000 for married taxpayers filing jointly.  Business and tax planning (especially for those with disallowed tax credits or owners of rental property) for 2006 should be adjusted ASAP to take advantage of the allowance.

2) Roth Conversions will be allowed for individuals with over $100,000 income beginning in 2010.  This will be a great deal for me personally as well as many of my younger-than-60 baby-boomer clients.  But this means a much higher than usual taxable income in that year.  To make the most of this tax break, it will be necessary to start planning now - especially for those people who have other  financial arrangements that are based on overall taxable income.  In many cases it takes more than a year to change the legal arrangements (dependency, residency, domestic relations orders, etc) that are based on total income.

If one of these affects you, schedule a tax planning session ASAP - with me or your own tax adviser.  The eventual tax savings will be well worth the investment.

For those who want to see the early details, a copy of the summary is posted at http://www.tonynovak.com/images/taxbill20060509.pdf

keywords:   Tax Increase Prevention and Reconciliation Act , alternate minimum tax, Roth IRA, TIPRA, H.R. 4297

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Copyright 2010 by Tony Novak. Originally produced and published for the "AskTony" column syndication prior to 2007. Edited and independently republished by the author in March 2010. All rights reserved.