How Does the Bush Tax Cut Plan Affect You?

Tuesday night, President Bush officially unveiled his hopes, plans, and promises for a new budget and a new direction in the nation's economy. The centerpiece of his speech before Congress and to the nation was his tax cut plan.

Under the Bush plan:

  • All federal income tax rates will be cut from the five current levels (15%, 28%, 31%, 36%, and 39.6%) to four, lower levels (10%, 15%, 25%, and 33%).
  • The Child Tax Credit will be increased from $500 to $1000 over a period of five years, and the income ceiling for claiming this credit will be raised from $110,000 to $200,000.
  • The so-called marriage penalty will be eased by providing a deduction of up to 10% of the lower-earning spouse's income.
  • Estate tax will be entirely repealed over a period of eight years.
  • Research and Development Tax Credit will be made a permanent part of the tax code.
  • Charitable deductions will be allowed for non-itemizing taxpayers.
  • Caps on corporate charitable contributions will be raised.
  • Education IRA contribution limitations will be increased.
  • Penalty-free withdrawals from IRAs made by people over age 55 for charitable donations will be allowed.

New, lower tax rates will affect nearly every taxpayer if the Bush plan is implemented. See how the rates will affect you by studying the chart in an article at msnbc.com.

If you already know (or can estimate) the amounts that will appear on your 2000 tax return, you can plug in those numbers in a calculator at the Kiplinger Web site and find out how much the Bush plan will save you, not just next year, but in five years, when the entire tax plan has been implemented.

You may like these other stories...

At long last, the Obama administration issued draft instructions along with revised draft tax forms that provide companies guidance on how to comply with the Affordable Care Act’s (ACA) employer mandate.The US Treasury...
Treasury Secretary Lew to speak on tax reform, inversionsDamian Paletta of the Wall Street Journal wrote on Friday that Treasury Secretary Jacob Lew is planning a September 8 speech about a controversial corporate strategy...
The IRS requires most freelancers and other self-employed individuals to use the cash method of accounting, under which income isn't counted until cash, a check, or an e-payment is received, and expenses aren't...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 18
In this course, Amber Setter will shine the light on different types of leadership behavior- an integral part of everyone's career.