The new 2001 withholding tax tables are in effect now, which means that tax withholding rates are lower and take home pay is increased. Taxpayers across the country will be trying to find new ways to spend their tax savings windfall . . . not!
Many taxpayers won't notice any change in their take-home pay. Others will notice only a small increase. The tax table change affects taxpayers with income that is taxed in the 28 percent and higher brackets. Those whose income is taxed entirely in the 15 percent tax bracket will see no change in take-home pay.
Never fear, however. All taxpayers will see the effect of the change in the 15 percent bracket. This lowest income tax bracket will include a drop to 10 percent for some of the first income earned by each taxpayer during the course of the year. This change in not being implemented by a change in the tax withholding tables until 2002. Instead, the change in the lowest tax bracket is being implemented with a rebate that will be mailed to most taxpayers, beginning this month and continuing through September.
The change in withholding percentages is being implemented in the 28 percent tax bracket for the rest of 2001. Most taxpayers affected by the changes in income tax withholding tables will see an increase of one half of one percent in take-home pay or approxiately $12 or less per month.