Sunday, May 27, 2001
Tax cut at a glance
A look at some of the highlights of the tax cut of 2001:
Treasury Department to mail taxpayers checks beginning this summer: up to $300 for an individual, $500 for a single parent and $600 for a married couple. Actual amounts based on income tax liability and based on people who filed federal income tax returns this year.
Rate cuts effective July 1, 2001.
New 10 percent tax rate applies to first $6,000 of taxable income for single people, $12,000 for married couples filing jointly.
Top 39.6 percent rate drops to 35 percent by 2006. Other rates drop gradually by 2006 from 36 percent to 33 percent; 31 percent to 28 percent; 28 percent to 25 percent. 15 percent remains the same.
Personal exemption phase-out repealed gradually beginning in 2006.
Child credit rises from $500 to $600 effective in 2001, meaning it could be claimed on next year's tax forms. Rises to $700 in 2005, $800 in 2009 and $1,000 in 2010.
Taxpayers earning more than $10,000 could claim a credit of 10 percent of earnings, rising to 15 percent over time, above that income level.
Standard deduction for married couples gradually raised beginning in 2005 so that it is equal to twice that of single taxpayers.
15 percent tax bracket gradually enlarged beginning in 2005 so it applies to more of a married couple's income.
Tax repealed in 2010.
Top 55 percent rate immediately dropped to 50 percent, eventually to 45 percent.
Tax-favored contribution limits for individual retirement accounts and Roth IRAs gradually raised from $2,000 to $5,000 by 2008. No change in income limits.
Tax-deferred contribution limits for 401(k)-type plans gradually increased from $10,500 to $15,000 in 2006.
Maximum $5,000 deduction for higher-education tuition. Lowered to $2,000 for incomes between $130,000 and $160,000. Phases out above that level. Applies from 2002 through 2005.
Limitation on deductibility of student loan interest removed.
Under budget rules, most tax cuts expire Dec. 31, 2010, unless renewed by a future Congress.
Tristaters look forward to tax rebates
Figure your savings
Tax cut at a glance
Families benefit most
National coverage from Associated Press
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