TAX BREAK DIGITAL 2002

ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001 Rebate Check/Credit For 2001 Family Tax Relief Education Incentives Estate & Gift Reform Retirement Plan Incentives

 OVERVIEW

On June 7^th, President Bush signed into law the Economic Growth and Tax Relief Reconciliation Act.  EGTRR provides across-the-board tax rate reductions, relief for married couples, new and enhanced tax incentives for students of all ages and children, estate tax relief, and new opportunities to increase contributions to IRA and all other retirement plans.

ACROSS-THE-BOARD INCOME TAX RATE-CUTS

New 10% Tax Bracket

After 2000, EGTRR creates a new 10% income tax bracket for a portion of taxable income that was taxed at 15%.  The new 10% rate applies for the first:

·        $6,000 of taxable income for single taxpayers,

·        $10,000 of taxable income for head of household, and

·        $12,000 for married couples filing joint returns.

The 10% rate bracket expands to the first $7,000 for single taxpayers and the first $14,000 for married couples in 2008.  After that, the 10% bracket is adjusted for annual inflation.  The 10% rate does not apply to estates or trusts.

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Family Tax Relief

Education Incentives

Estate & Gift Reform

Retirement Plan Incentives