The change in the tax rates due to recent tax legislation provides a planning opportunity for tax advisers. Taxpayers need to be aware of the impact of the new, slightly lower tax rates, which may have an effect on planning for third and fourth quarterly estimated payments.
New tax tables published July 1 reflect the change in tax rates. Some taxpayers may benefit from a slight reduction in quarterly payments. Other taxpayers need to be made aware of the fact that their existing payment structure is sufficient to protect them from penalties and no change is necessary.
The increase in the child tax credit from $500 to $600 for the year 2001 may also have an effect on planning for quarterly payments.
In either case, the new tax law presents several opportunities for accountants to provide beneficial services to their clients.