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Old 02-20-2010, 01:20 PM
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income increase led to larger than expected tax increase

My tax for this year ended up being $8000 higher than 2008, while my state (Alabama) was unchanged. Our combined income rose from 146000 to 187000 with my wife now working fulltime (she just did this half of last year). Withholding percentage was slightly lower (same for her, 15 to 14% for me). We lost one dependent (on her own now), and had about 3500 less in charity contributions.
I realize we jumped from the 25 to 28% bracket but when I calculated my tax at 25% is was only $250 lower. The loss of exemptions and contributions accounted for $600 more and if I used the same withholding percentage from 2008 my tax was still $5600 higher than 2008.
I don't undetstand why my taxes have gone up so much with essentailly the same amount of withholding and other facors being made equal, and why there was no change in my Alabama taxes. What am I not understanding?



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Old 02-22-2010, 09:25 AM
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You may have been subject to AMT taxes! What was the amount shown on Line 45, that is the amount of AMT tax calculated on Form 6251?

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Old 02-22-2010, 09:11 PM
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No AMT. My taxes were done on TurboTax, btw. I have a fairly simple return. Two incomes, no investment or other incomes other than state tax refund. Deductions of only mortgage interest, taxes paid, and charity contributions.



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