I am unsure on what to do with our withholdings. Our income is about 145000. We significantly increased contributions to our retirement funds, reducing income by about 20000. We have a large mortgage- about 400000 and our property taxes are 5000. We have had a lot withheld from paychecks to prepare for being subject to the AMT. When there is a patch, we get money back. If there was no patch last year, we would have had to pay. I would like to reduce our withholding to give us more take home pay, but are so fearful of the AMT. Is it worth the risk to make the move and be more flexible on our W-2'S? I am concerned about the changes that may come about with the new presidency......

The good news is that the Congress has been working on an AMT patch. I have heard that the incoming Congress wants to address this key middleclass issue quickly.

You should not be that distressed on this matter as the entire middleclass with your income is currently being trapped into this AMT trap! Of all the tax returns that I have prepared in the prior 2-3 years, the maximum impact I have seen in tax dollars has been less than $3,500 from taxpayers whose taxable income matches your amounts. Thus, you should not panic and help may be on the way with a new Obama Administration.

There is no point in withholding additional amounts in taxes as you may end with over-withholding and receiving a much smaller net paycheck. This may make life financially very challenging. Further, you would find that you may actually receive a bigger tax refund in April 2010! It doesn't make sense over withholding and then letting Uncle Sam keep your money interest free till April 15h, 2010!

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