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FacTS promotes Aashish M. Parekh to Chief Tax Professional position after he successfully passed all the four sections of enrolled agent exam on his first attempt. Enrolled Agent exam is 100% tax related exam that covers tax topics related to individuals, self employed, partnership, corporations, estates, trusts and ethics. An enrolled agent is licensed to represent any tax entity before the IRS for their tax issues.
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Snap shot of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA)
Accelerated 10-Percent Bracket Expansion
$6,000 to $7,000 for single taxpayers (and from $12,000 to $14,000 for married couples).
Accelerated Reduction in Income Tax Rates
New rates of 25%, 28%. 33% and 35% (from 27%, 30%, 35% and 38.6%). These reductions benefit married couples with taxable income greater than $47,450 and single taxpayers with taxable income greater than $28,400.
Accelerated Reduction in Marriage Penalty
The standard deduction for married couples is increased to double the amount of standard deduction for single taxpayers in 2003 and 2004. The width of the 15-percent tax bracket for married couples is increased to twice the width for single taxpayers in 2003 and 2004.
Accelerated Increase in Child Tax Credit: The amount of child tax credit is increased to $1,000 in 2003 and 2004 (from $600) accelerating a scheduled phase-in over the period between 2005 and 2010. In 2003, the increased amount of the child tax credit will be paid in advance beginning in July 2003 on the basis of information on the taxpayer’s 2002 tax return filed in 2003.
Reduction in Tax Rates on Dividends and Capital Gains: The maximum tax rate on dividends paid by corporation to individuals and on individual’s capital gains is reduced to 15% in 2003 through 2008. For taxpayers in the 10% and 15% ordinary income tax rate brackets, the rate on dividends and capital gains is reduced to 5% in 2003 through 2007, and to zero in 2008. The new rates apply to capital gains realized on or after May 6, 2003, and to dividends received in 2003 and after.
Increase in Small Business Expensing for New Investment: The amount of investment that may be immediately deducted by small businesses is increased from $25,000 to $100,000 beginning in 2003. The amount of investment qualifying for this immediate deduction begins to phase out for small businesses with investment in excess of $400,000 (from $200,000).
Increase in First-Year Bonus Depreciation: The additional first-year bonus depreciation deduction is increased from 30 percent to 50 percent for investments acquired and placed in service after May 5, 2003 and before January 1, 2005.
If you need more info on this, please contact us at 480-984-1003.
Below is some information that provides you with some valuable knowledge regarding some of the changes in Tax Law in year 2002.
Some of the important changes that affects teachers and other educators to your school.
1) Above the line deduction for Educators
Teachers and other educators who spend their own money to purchase books, computer hardware and software, and other materials for use in the classroom can deduct up to $250 for such qualifying expenses. Since this is above-the-line deduction, educators won’t have to itemize (Schedule A) their deductions in order to claim this tax break. An “eligible educator” i.e. a K-12 teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during a school year can deduct this expense by reporting it on line 23 of the 2002 Form 1040.
2) College Tuition Deduction
You may be able to deduct up to $3,000 of qualified college tuition and fees paid for yourself, your spouse, or your dependents in year 2002. This is also above-the-line deduction and is available wether you itemize (Schedule A) or not. Qualified tuition and related expenses include tuition and fees (but not necessarily the costs of books, room and board, and other supplies) paid to a higher-educational institution as a condition of the enrollment or attendance of an eligible student. There is an income limitation in order to take this deduction.
3) Retirement Savings Contribution Credit
Lower-income taxpayers will receive and additional credit (up to 50% of the contribution), with a maximum credit of $1,000) for virtually any contribution made to a retirment account, including 401(k) plans, 403 (b) plans, 457 plans, SIMPLE IRAs, SEP IRAs, and regular IRAs (both traditional and Roth). This credit will b extremely valuable for lower-income taxpayers who are making retirement plan contributions in virtually any form. Call 480-984-1003 for income limitation and use of proper form.
This is just a brief description of some of the major changes that arrive this year. Please call us at 480-984-1003 if you’d like more details on any of these.
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Some Tax Law changes that may affect Employers due to Jobs and Growth Tax Relief Reconciliation Act of 2003:
Increase in Small Business Expensing for New Investment: The amount of investment that may be immediately deducted by small businesses is increased from $25,000 to $100,000 beginning in 2003. The amount of investment qualifying for this immediate deduction begins to phase out for small businesses with investment in excess of $400,000 (from $200,000).
Increase in First-Year Bonus Depreciation: The additional first-year bonus depreciation deduction is increased from 30 percent to 50 percent for investments acquired and placed in service after May 5, 2003 and before January 1, 2005.
If you need more info on this, please contact us at 480-984-1003
This is just a brief description of some of the major changes that arrive this year. Please call us at 480-984-1003 if you’d like more details on any of these.
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