As last-minute filers approach Tuesday's deadline, some are going to be in for a shock: They're going to fall into the territory of the alternative minimum tax.

The AMT was designed to ensure that high-income individuals paid at least some taxes. But the AMT, which has its roots in a 1969 minimum-tax law, was not indexed to inflation, so it has ensnared an increasing number of Americans with higher tax bills than they would pay under the usual structure.

Some changes by Congress in recent years have kept a lid on that growth, but the measures are temporary: An estimated 3.5 million taxpayers are due to pay the AMT for 2006, but without any changes in the current law that will explode to more than 23 million this year and more than 32 million by 2010, according to experts at the Tax Policy Center.

Mortgage insurance not deductible yet

Q: A mortgage broker recently told me tax laws changed for 2006 and private mortgage insurance can now be deducted on tax returns. I have not been able to find documentation confirming this. Do you know if this is true? I have already filed my return. Would it be worth filing an amended return?

A: Relax. You haven't missed anything.

It's true that private mortgage premiums will be income tax deductible, but that's only for new mortgages placed in 2007. And unless it's later extended, the deduction will apply only to 2007.

Q: My uncle recently had a severe heart attack. Fearing that he would die soon, he was advised to give his daughter a quick-claim deed to his house to avoid probate court. A friend told him, however, that because of not inheriting the house through a will, his daughter would have to pay capital gains tax based on the original basis of the home rather than the stepped-up basis afforded a house at inheritance.

American Samoa Chamber of Commerce argues for revamp of tax laws

The President of the American Samoa Chamber of Commerce feels confident that the chamber's efforts to revamp the territory's tax laws has the governor's support.

Mr Robinson says companies also have to pay a 30 percent dividend witholding tax and could also be liable for a further 30 percent, for what is known as an interest witholding tax.

Preparing Tax Form 1040

These Form 1040 tax instructions apply to the year 2006 only. You can find prior-year tax forms and instructions on the Tax Forms page. What's New for 2006 For many people, preparing Form 1040 for tax year 2006 will be similar to last year's tax return. However, there are several important changes in the tax law affecting nearly everyone in America. Here's some highlights.

Tax Deadline is April 17th. Find more tax deadlines in the Tax Calendar.

The Telephone Tax Refund is a one-time-only credit against your 2006 taxes. t represents a refund of excise taxes paid on long-distance telephone service. You can choose between the standard amounts set by the IRS or the actual amount of excise taxes you paid.

Split Refunds using Direct Deposit is a new direct deposit feature from the IRS.

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