Just a few short weeks ago, my weekly article discussed the difficulty of tax planning today. The way the rules keep phasing in and out, it's like trying to hit a moving target.

That target just started zigzagging again.

Earlier this month, the House and Senate passed HR 4297, The Tax Increase Prevention and Reconciliation Act of 2005. This bill extends and increases some of the expiring tax benefits, adding some new sugar for some taxpayers and higher taxes for others. The President signed the bill into law May 17.

Here are some of the highlights of the new law:

Alternative Minimum Tax (AMT) relief
For tax year 2006, the new law allows increases the AMT exemption to $62,550 for joint filers, $42,500 for singles, and $31,275 for married/separate filers. These exemption levels are even higher than those from 2005. Without the passage, AMT exemption amounts would have fallen back to their year-2000 levels. But since the new law only addresses the AMT for 2006, we'll have to relive this fight again this time next year.

Are you unfamiliar with the AMT? You might want to get familiar. More and more taxpayers are being subjected to the dreaded AMT every year. It's just one more thing you should plan to avoid, if you can.

AMT credit relief
The new law also ensures that many credits for regular tax purposes will also remain credits for the AMT into 2006. But, just as with AMT exemption relief, this will be a quick fix for 2006 alone. In 2007, unless new legislation is passed, most of the credits allowed for regular tax purposes (such as the child care credit, the child tax credit, and education credits) won't count for AMT purposes.

Roth IRA conversion changes
The new law, beginning in 2010, also allows any individual of any income level to convert a traditional IRA to a Roth IRA. No more will you be stuck under the $100,000 adjusted gross income (AGI) level in order to make a conversion.

Additionally, for conversions made in 2010, the new law allows for the "spread out" of the conversion income over a two-year period. Congress hopes that more folks will make such a conversion, thereby increasing the federal coffers and offsetting some of the revenue lost by the AMT and other provisions.

Maximum capital gains and dividend tax extended
Neither was set to expire until 2008, but the new law pushed these provisions out another two years apiece. The 15% maximum taxes on long-term gains and dividends are now set until the end of 2010.

Expensing of equipment/Section 179 expense
The law allowing small business to deduct up to $100,000 of business equipment purchased during the year has also been extended. This amount has been adjusted for inflation since 2003, and has also been extended until the end of 2009. For 2006, businesses can expense up to $108,000 worth of equipment.

Kiddie taxes
Once, one of the best ways to "shift" income into a lower tax bracket was to transfer assets into the names of your children, then pay taxes on those assets at the lower children's tax rates. To squash this technique, younger kids were required to report any taxes on unearned income at their parents' rates. Under the old laws, the so-called Kiddie Tax no longer applied once the kids hit age 14. But the new law extends that age limit (effective immediately, and retroactive back to Jan. 1, 2006) to age 18 for younger taxpayers.

More to come?
You can count on it. Another tax bill is expected to extend a number of other provisions that expired at the end of 2005, including the sales tax deduction provisions, the "savers" credit for low-income taxpayers, and the educator deduction. The revival of these expired positions is certainly no "slam-dunk;" though they sound small individually, they collectively represent about $90 billion dollars in single-year tax relief. Given the nation's significant budget deficits, additional tax reductions may not be popular. But if there is any movement on any of these issues, we'll be sure to let you know.

When he's not dealing with tax issues, Roy Lewis is a motivational speaker who lives in a trailer down by the river. He understands that The Motley Fool is all about investors writing for investors. You can take a look at the stocks he owns, as long as you promise not to ask him which stock to buy. He'll be glad to help you compute your gain or loss when you finally sell a stock, though.