2001 Tax Cut

Congress has passed and on June 7, 2001 President Bush signed The Economic Growth and Tax Relief Reconciliation Act of 2001 which is the largest tax cut in two decades. Some of the tax cuts take effect this year, while others will be phased in over the next ten years. This is an extremely complex change in many areas of tax law. Additionally, people and the media are often confused as to what the law provides because of the many proposals that have been discussed during the last six months  - most of which did not make it into the final law.

One provision calls for an immediate tax rebate. If you filed a 2000 tax return, you should receive your rebate check in the mail sometime between July 1 and October 1, 2001. The checks will be up to $600 for married couples, $500 for head-of-household filers, and $300 for single taxpayers. Your rebate check will be based on last year's filing status and your reported taxable income.

Each tax rate above the 15 percent bracket will drop one percent beginning July 1, 2001. Rates will continue to decrease through 2006. The IRS will send employers new withholding tables so they can begin withholding less tax from employees' paychecks.

In addition to a drop in tax rates, the new law includes at some point in the future:

* An increase in the child tax credit
* Marriage penalty relief provisions
* Education incentives
* Estate, gift, and generation-skipping tax provisions
* Pension and IRA provisions
* Alternative minimum tax relief
* A number of miscellaneous provisions

To make the most of the tax breaks in the new law, you should review your total financial plan, including income taxes. Give us a call for assistance. We are here to help you take advantage of all the income tax breaks for which you qualify.

Related Information:
        Ideas and Information About Taxes
        Selecting a Tax Advisor
        Tax Services

© Copyright 2001 Raymond S. Kulzick. All rights reserved. 010601.