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<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0><script type="text/javascript" src="http://hb.lycos.com/hb.js"></script> <script type="text/javascript" src="http://ratings.lycos.com/ratings/lycosRating.js.php"></script> <script type="text/javascript"><![CDATA[//><!]]></script> <script type="text/javascript" src="http://scripts.lycos.com/catman/init.js"></script> <script type="text/javascript" src="http://members.tripod.com/adm/ad/code-start.js"></script> <script type="text/javascript" src="http://members.tripod.com/adm/ad/code-middle.js"></script> <script type="text/javascript" src="http://members.tripod.com/adm/ad/code-end.js"></script> <noscript> <img src="http://members.tripod.com/adm/img/common/ot_noscript.gif?rand=684677" alt="" width="1" height="1" />  <iframe frameborder="0" marginwidth="0" marginheight="0" scrolling="no" width="728" height="90" src="http://ad.yieldmanager.com/st?ad_type=iframe&ad_size=728x90&section=209094"></iframe>  </noscript> <table cellpadding=0 cellspacing=0 border=0 height="100%"><tr> <td valign="top" width=168 BGCOLOR="#000000" TEXT="#F7F7FF" background="098a11c3.gif"> <div> Recent Tax law Changes</div> <bR> <bR> <bR> <bR> <bR> <bR> <bR> <bR> <bR> </td> <td valign="top" BGCOLOR="#000000" TEXT="#F7F7FF"> <div> <FONT SIZE="5" COLOR="#99CC00" FACE="Arial" ><B>ASK THE TAXMASTER</b></FONT><FONT SIZE="1" COLOR="#FFCC99" FACE="Arial" >     </FONT>|   <A HREF="index.htm" TARGET="_top" TITLE="ASK THE TAXMASTER"><U><B>home</b></U></A></div> <div> <A HREF="id21.htm" TARGET="_top" TITLE="Tax Links"><U>Tax Links</U></A>   |   <A HREF="id22.htm" TARGET="_top" TITLE="Tax Research Links"><U>Tax Research Links</U></A>   |   <B>News and Events</b>   |   <A HREF="id20.htm" TARGET="_top" TITLE="Contact Us"><U>Contact Us</U></A></div> <div> <IMG SRC="097f4010.gif" border=0 width="500" height="1" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <div> News and Events</div> <div> <B><IMG SRC="0d1d00f0.gif" border=0 width="720" height="15" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></b></div> <bR> <bR> <div> <B>2003 TAX LAW ACT </b></div> <bR> <div> <B><IMG SRC="171d8510.gif" border=0 width="216" height="81" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></b></div> <bR> <bR> <div> <IMG SRC="0ee58140.gif" border=0 width="600" height="20" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <bR> <div> <B>JOB CREATION & WORKER ASSISTANCE ACT OF  2002</b></div> <bR> <div> <B>Section 1256 Contracts:</b></div> <div> Wash sale losses will be allowed for all Section 1256 sales or exchanges.</div> <div> ie:  Regulated contract futures</div> <div>       Foreign currency contract</div> <div>       Non-equity options</div> <div>       Dealer options</div> <bR> <bR> <div> <B>Education Deduction:</b></div> <div> Up to $250.00 can be deducted from gross income for work expenses incurred by education professionals. The deduction can be claimed by individuals who do not itemize.</div> <div> Education professionals include: Teachers; instructors; counselors; principals; etc. who work at least 900 hours during the school year.</div> <bR> <bR> <div> <B>Welfare to Work Credit Extended:</b></div> <div> The credit for wages paid to qualified individuals has been extended through 2003.</div> <bR> <bR> <div> <B>NOL Carryback:</b></div> <div> NOL Carryback has been extended to the five years prior to the taxable year.</div> <bR> <bR> <div> <B>179 Deduction:</b></div> <div> The maximum deduction allowed by Section 179 has been increased to $24,000.</div> <div> The $200,000 phase out will still apply.</div> <bR> <bR> <div> <B>Oil Depletion Deduction Limitations:</b></div> <div> Limitations to Taxable Income are currently suspended until 2004.</div> <bR> <bR> <div> <B>New York City Liberty Zone Tax Incentives:</b></div> <bR> <div> <B>Special Depreciation Allowance:</b></div> <div> An additional 30% depreciation deduction will be allowed for qualified property placed in service, within the liberty zone, after September 10, 2001.</div> <bR> <div> <B>Increased Section 179 Deduction:</b></div> <div> The maximum deduction allowed by Section 179 will be $35,000 for Liberty Zone Property placed in service after September 10, 2001. The phase out rule still applies.</div> <bR> <div> <B>Leasehold Improvements Recovery Period:</b></div> <div> The recovery period for certain leasehold improvements made within the Liberty Zone will be 5 years as opposed to the normal 9 years.</div> <bR> <div> <B>LIBERTY ZONE PROPERTY OWNERS MAY ELECT </b><B>NOT</b><B> TO UTILIZE THE SPECIAL DEPRECIATION RULES IN EFFECT.</b><FONT SIZE="2" COLOR="#FFFFCC" FACE="Arial" > </FONT></div> <bR> <div> <B>   </b></div> <div> <IMG SRC="0ee58140.gif" border=0 width="600" height="20" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <bR> <bR> <div> TAX RECONCILIATION ACT OF 2001  </div> <bR> <bR> <div>      <FONT SIZE="3" COLOR="#FFFFCC" FACE="Arial" ><B>Tax Rates Lowered</b></FONT></div> <bR> <div> New employer withholding tables become effective July 1, 2001.</div> <bR> <div> First 6,000 of taxable income will be taxed at 10% instead of the 15% rate. This change is retroactive to January 1, 2001. The IRS will be automatically issuing refunds to reflect the change in tax.  </div> <bR> <div> <B>15% Rate will change as follows:</b></div> <bR> <div> 2001   .......... reduced to 10% for first $6,000 of taxable                                     </div> <div> <B>                                       </b><FONT SIZE="2" COLOR="#FFFFCC" FACE="Arial" >income for single individuals.</FONT></div> <div> <B>                                                 </b></div> <div> <B>        </b><FONT SIZE="2" COLOR="#FFFFCC" FACE="Arial" >first $10,000</FONT><B> </b><FONT SIZE="2" COLOR="#FFFFCC" FACE="Arial" >of taxable income for head of household.                  </FONT></div> <div> <B> </b></div> <div> <B>        </b><FONT SIZE="2" COLOR="#FFFFCC" FACE="Arial" >first $12,000 of taxable income for married. </FONT></div> <bR> <div> <B>28% Rate will change as follows:</b></div> <bR> <div> 2001-2003   .......... 27%</div> <div> 2004-2005   .......... 26%</div> <div> 2006-           .......... 25%</div> <bR> <div> <B>31% Rate will change as follows:</b></div> <bR> <div> 2001-2003   .......... 30%</div> <div> 2004-2005   .......... 29%</div> <div> 2006-           .......... 28%</div> <bR> <div> <B>36% Rate will change as follows:</b></div> <bR> <div> 2001-2003   .......... 35%</div> <div> 2004-2005   .......... 34%</div> <div> 2006-           .......... 33%</div> <bR> <div> <B>39% Rate will change as follows:</b></div> <bR> <div> 2001-2003   .......... 38.6%</div> <div> 2004-2005   .......... 37.6%</div> <div> 2006-           .......... 35%</div> <bR> <div> <B>AMT Tax does not change:</b></div> <bR> <div> 26% for the first $175,000.</div> <div> Allowance of a 45,000 taxable income deduction.</div> <div> 28% on amounts more than $175,000.</div> <div> <B> </b></div> <div> <B><IMG SRC="0ee58140.gif" border=0 width="600" height="20" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></b></div> <bR> <div> <B>Standard Mileage Rate Reduced for 2001</b></div> <bR> <div> The standard mileage rate for business use will be 34.5 cents a mile.</div> <bR> <div> <B><IMG SRC="0ee58140.gif" border=0 width="600" height="20" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></b></div> <bR> <div> <B>Capital Gain Tax Rate Reduction</b></div> <bR> <div> Beginning in 2001; the 10% capital gains rate will be lowered to 8% for qualified 5 year gains.</div> <bR> <div> Beginning in 2006, the 20% capital gains rate will be lowered to 18% for five year qualified gains.</div> <bR> <div> <B><IMG SRC="0ee58140.gif" border=0 width="600" height="20" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></b></div> <bR> <div> <B>Estate Tax Exclusion Continue to Increase</b></div> <bR> <div> Filing Requirement for 2001 .......$   675,000</div> <div>                                      </div> <bR> <div> The Economic Growth and Tax Relief Reconciliation Act </div> <div> Continues to increase the exclusion on the following timetable:</div> <bR> <div>                                      2002........  $ 1,000,000</div> <div>                                      2003.........    1,000,000</div> <div>                                      2004.........    1,500,000</div> <div>                                      2005.........    1,500,000</div> <div>                                      2006.........    2,000,000</div> <bR> <bR> <bR> <div> <B>THE ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT</b>, SIGNED INTO LAW BY PRESIDENT BUSH ON JUNE 7,2001, PASSED CONGRESS BY A 240-154 VOTE MARGIN AND PASSED THROUGH THE SENATE ON A MARGIN OF 58-33.</div> <bR> <div> IT SEEKS TO DO MUCH MORE THAN INCREASE THE ESTATE TAX EXCLUSION. THE PASSING OF THE LAW HAS ENACTED THE LARGEST TAX CUT IN 20 YEARS. IT IS ESTIMATED THAT A 1.35 TRILLION DOLLAR TAX CUT WILL BE PHASED IN OVER THE NEXT TEN YEARS.</div> <bR> <div> <B>SOME HIGHLIGHTS OF THE BILL ARE TOUCHED UPON BELOW:</b></div> <div>     </div> <bR> <div> <B>Traditional and Roth IRA Contribution Limits:</b></div> <bR> <div>                                     2002-2004 ....... $ 3,000</div> <div>                                     2005-2007 .......    4,000</div> <div>                                     2008-         ........   5,000</div> <bR> <div> <B><IMG SRC="0ee58140.gif" border=0 width="600" height="20" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></b></div> <bR> <div> <B>401(k) Contribution Limits Increase:</b></div> <bR> <div> <B>                              </b><FONT SIZE="2" COLOR="#FFFFCC" FACE="Arial" >2002   .......... $ 11,000</FONT></div> <div>                                     2003   ..........    12,000</div> <div>                                     2004   ..........    13,000</div> <div>                                     2005   ..........    14,000 </div> <div> <B>                              </b><FONT SIZE="2" COLOR="#FFFFCC" FACE="Arial" >2006   ..........    15,000</FONT></div> <bR> <div> <B><IMG SRC="0ee58140.gif" border=0 width="600" height="20" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></b></div> <bR> <bR> <div> <B>Child Tax Credit to Double by 2010:</b></div> <bR> <div>                            2001-2004   ........... $   600.00</div> <div>                            2005-2008   ...........      700.00</div> <div>                            2009-2009   ...........      800.00</div> <div>                            2010-           ...........   1,000.00</div> <bR> <div> <B><IMG SRC="0ee58140.gif" border=0 width="600" height="20" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></b></div> <bR> <div> <B>Adoption Credit Increase:</b></div> <bR> <div>                                      2001  ............ $  6,000</div> <div>                                      2002  ............   10,000</div> <div> Increase will apply to both special needs and non-special needs.</div> <div> The phase out which is applied to the adoption credit will increase from $ 75,000 to 150,000 in 2002.                                                                                                                                   <IMG SRC="0f45f690.gif" border=0 width="95" height="105" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> </td> </tr></table></body>