New Tax Laws May Mean Lower Tax Bills For Your Family

	Ask your accountant about tax laws affecting the family.

On May 28, 2003, President Bush signed the Jobs & Growth Tax Relief Reconciliation Act of 2003. Here is a closer look at some of the provisions within this act that may result in lower tax bills for your family.

Child Tax Credit

You can now receive a rebate check in the amount of $1,000 per qualifying child whereas before your rebate was $600. A qualifying child is 17 years old or under, your dependent and a U.S. citizen. However, the credit phases out if your gross income exceeds certain amounts. Here are the limits.

– $110,000 (for married taxpayers filing jointly)
– $75,000 (for unmarried individuals)
– $55,000 (for married taxpayers filing separately)

Marriage Penalty Relief

Standard Deduction

The standard deduction for married taxpayers filing jointly has increased from $7,950 to $9,500. If married couples file separately, then the standard deduction has changed from $3,975 to the same as for single filers.

15% Bracket

In 2002, married couples in the 15% tax bracket filing jointly ended at $47,450 while married single filers ended at 23, 725. The new law increases the size of the 15% tax bracket for married couples filing joint returns to twice that of the 15% bracket for single filers.

10% Bracket

The bracket limit for single taxpayers has increased from $6,000 to $7,000 and the limits for married taxpayers filing jointly has increased from $12,000 to $14,000.

Lower Tax Rates

Taxpayers falling within certain tax brackets will benefit from rate reductions of at least 2%.

– $28,400 (single)
– $56,800 (married filing jointly, and qualifying widow(ers)
– $38,050 (head of household)
– $28,400 (married filing separately)

Capital Gains

This new law provides lower tax bills for taxpayers that sell property, stocks and mutual funds that are held for more than one year and sold or exchanged at a gain. The maximum tax rates that are levied on adjusted net capital gains have decreased from 10% to 5% for taxpayers in the 10% and 15% brackets and from 10% to 15% for all other categories. The rates are further decreased to 0% in 2008 for the 10% and 15% tax brackets.

Ask you accountant about the new tax laws and how your family can reap the maximum benefits. Every penny you save is money toward your family’s financial freedom.

 Back to top      Related...        Home