Washington (June 13, 2003) -- Self-employed persons, investors, and others who make estimated tax payments can begin benefiting from the lower tax rates and other changes made by the new tax law next Monday, June 16, when they make their second quarterly payment. By using the new provisions to refigure their projected 2003 income tax, many will be able to reduce their payments for the rest of the year.
The IRS Web site has an overview of key changes to be considered, the new tax rate schedules to be used and worksheets in Publication 505, "Tax Withholding and Estimated Tax," for computing special items. To view the changes, go to www.irs.gov/newsroom, click on "What's Hot" and then the estimated tax article.
For many, the biggest impact on quarterly payments will come from lower tax rates. The 10 percent rate applies to the first $7,000 of taxable income for single persons, $14,000 for married persons filing jointly and qualifying widows or widowers. The 15 percent rate for joint filers and qualifying widows or widowers covers up to $56,800 of taxable income, and rates above 15 percent are lowered to 25, 28, 33 and 35 percent.
In addition to the tax rates, other key changes include a higher standard deduction for married persons, a higher alternative minimum tax exemption amount, and higher deduction for business expenses and first-year depreciation.
-- WebCPA staff
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