Tax Increase Prevention and Reconciliation Act of 2005 - TIPRA


DEFINITION of 'Tax Increase Prevention and Reconciliation Act of 2005 - TIPRA'

A tax-related act signed by President George W. Bush in May 2006 that contains revisions to pre-existing tax laws. Revisions include topics concerning investor-related tax breaks, business provisions, individual retirement accounts, "kiddie tax" and alternative minimum taxes.

Also known as Public Law 109-222.

BREAKING DOWN 'Tax Increase Prevention and Reconciliation Act of 2005 - TIPRA'

For the most part, the provisions are beneficial for the vast majority of taxpayers. For example, lowered capital gain tax rates were extended until 2010 and higher exemption amounts for the alternative minimum tax will enable qualified taxpayers to pay a lower amount of taxes in those areas.

Furthermore, TIPRA also includes some retirement-related benefits. For example, TIPRA enables taxpayers with modified adjusted gross incomes surpassing $100,000 to be eligible for a Roth IRA conversion.

  1. Taxes

    An involuntary fee levied on corporations or individuals that ...
  2. Roth IRA

    An individual retirement plan that bears many similarities to ...
  3. Modified Adjusted Gross Income ...

    The amount of income that determines how much of an individual's ...
  4. Roth IRA Conversion

    A reportable movement of assets from a Traditional, SEP or SIMPLE ...
  5. Alternative Minimum Tax - AMT

    A tax calculation that adds certain tax preference items back ...
  6. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
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  1. Earnings within a Roth IRA are tax free, so are these earnings included in the modified ...

    There are two possible answers to this question, depending on whether or not the distribution from the Roth IRA is qualified. Earnings ... Read Full Answer >>
  2. Do tax brackets include Social Security?

    A portion of your Social Security benefits may be subject to federal taxation using tax brackets. Your tax bracket is determined ... Read Full Answer >>
  3. Do 401k contributions reduce AGI and/or MAGI?

    Traditional 401(k) contributions effectively reduce both adjusted gross income (AGI) and modified adjusted gross income (MAGI). ... Read Full Answer >>
  4. Are IRS audits random?

    While the U.S. Internal Revenue Service (IRS) conducts some of its tax audits using random selection based on a statistical ... Read Full Answer >>
  5. Does the IRS report to credit bureaus?

    The Internal Revenue Service (IRS) doesn't report overdue tax debt to credit bureaus. Federal law protects the privacy of ... Read Full Answer >>
  6. Does the IRS charge interest on penalties?

    The Internal Revenue Service (IRS) charges interest on any overdue taxes owed, but it does not charge interest on penalties. ... Read Full Answer >>

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