Balter Tax Service

2003 Tax Relief Act

The 2003 Tax Relief Act was signed into law May 28, 2003.

The key provisions impacting this tax year are:

1	Child Tax Credit increased to $1,000, from $600.
2	Expanded 10% income tax bracket from $6,000 to $7,000 for single filers and from $12,000 to $14,000 for married taxpayers.
3	Reduced tax rates for tax brackets above 15% (see front page).
4	Reduced "marriage penalty" by expanding the Standard Deduction and the 15% income tax bracket for married couples to twice that of single filers.
5	Lower long-term capital gains tax rate and the dividend tax rate to 15% (only 5% for those in the lowest two income tax brackets).
6	Increased the amount of annual year one capital expenditure expense to $100,000 (formerly $25,000) via Section 179. The benefit phases out when total annual purchases of qualified capital equipment exceeds $400,000 (this is double the amount from last year.)
7	Increased First-Year Bonus Depreciation to 50% for assets placed in service after May 5, 2003 for small businesses.

Many of the changes in the 2003 Tax Relief Act are only temporary to control the overall cost of the bill. Rest assured, a thorough review of your situation will be undertaken to ensure these tax law changes and those implemented in 2002 and 2001 are appropriately applied to your return. Should you have any questions or concerns please ask.