Hi ATR ~
The search term "Jobs & Growth Tax Relief Reconciliation Act of 2003"
(without the quotation marks) on Google returns over 13,000 entries.
Some are easier than others to wade through to get to the heart of the
matter.
To answer your questions:
1. With regard to the "marriage penalty" -
========================================
A. 15% Tax Bracket:
-------------------
For the 15% income tax bracket, the Act doubles the taxation rate of
the single taxpayer, but also doubles the standard deduction rate for
a single return for the years 2003 and 2004.
The 180% for 2005, 187% for 2006, and 193% for 2007 are not changed
and remain in effect, which means a decrease in the 15% tax bracket
for these years when compared to 2003 & 2004.
"Sec. 102 Acceleration of 15-percent individual income tax rate
bracket expansion for married taxpayers filing joint returns.
For taxable years beginning in 2003 and 2004, the Act increases the
width of the 15-percent income tax rate bracket for married taxpayers
filing joint returns to twice the width of the 15-percent income tax
rate bracket for single returns. For taxable years beginning after
2004, the rate bracket reverts to the levels prescribed under present
law (e.g., for 2005 the width of the 15-percent bracket for married
taxpayers filing joint returns will be 180 percent of the 15-percent
bracket for single returns)." (IRS "Summary of Provisions in the Jobs
& Growth Tax Relief Reconciliation Act of 2003", June 20, 2003)
- http://www.irs.gov/businesses/small/article/0,,id=110431,00.html
B. 10% Tax Bracket:
-------------------
This bracket will increase to $14,000 for married filing jointly
taxpayers, stay at $10,000 for head of household taxpayers, and
increase to $7,000 for other taxpayers, effective for 2003 & 2004.
This will revert back to the $12,000, $10,000, and $6,000 levels in
2005 and continue as under old law.
"Sec. 104 Acceleration of 10-percent individual income tax rate
bracket expansion.
The Act accelerates the increase in the taxable income levels of the
10-percent rate bracket so that the income levels currently scheduled
for 2008 become effective in 2003 and 2004. Thus, for 2003, the
taxable income levels for the 10-percent regular income tax rate
bracket increase for single individuals from $6,000 to $7,000, and for
married taxpayers filing joint returns from $12,000 to $14,000. For
2004, these amounts are indexed for inflation. For taxable years
beginning after 2004, the taxable income levels for the 10-percent
rate bracket revert to the levels provided under present law." (IRS
"Summary of Provisions in the Jobs & Growth Tax Relief Reconciliation
Act of 2003", June 20, 2003)
- http://www.irs.gov/businesses/small/article/0,,id=110431,00.html
C. Standard Deductions:
-----------------------
For 2003 and 2004, standard deductions for married taxpayers filing
jointly will be twice (200%) that of single taxpayers. The 174% for
2005, 184% for 2006, 1987 for 2007, and 190% for 2008 are still
effective, which means a decrease in the standard deduction for these
years when compared to 2003 & 2004.
"Sec. 103 Acceleration of increase in standard deduction for married
taxpayers filing joint returns
The Act provides that for 2003 and 2004 the basic standard deduction
amount for married taxpayers filing a joint return will be twice the
basic standard deduction amount for single individuals. For taxable
years beginning after 2004, the standard deduction for married
taxpayers filing a joint return reverts to the level prescribed under
present law (e.g., for 2005 the basic standard deduction for married
taxpayers filing jointly will be 174 percent of that for unmarried
individuals)." (IRS "Summary of Provisions in the Jobs & Growth Tax
Relief Reconciliation Act of 2003", June 20, 2003)
- http://www.irs.gov/businesses/small/article/0,,id=110431,00.html
2. With regard to taxation on dividends -
=======================================
Title III of Jobs & Growth Tax Relief Reconciliation Act of 2003 deals
with the reduction in taxes on capital gains and dividends.
Dividends will be combined with the taxpayer’s net capital gain and
will be taxed at the rates below for capital gains. Qualified
dividends include those received during the current year from domestic
corporations and certain qualified foreign corporations.
Restrictions to qualify for the capital gains rates require that the
shareholder must own the stock for more than 60 days during the
120-day period beginning 60 days before the ex-dividend date.
"Capital Gains Tax Rate Decreases for Individuals The 10% rate
decreases to 5% (0% in tax years beginning after 2007). The 20% rate
decreases to 15%. The tax computation for years that include May 6,
2003 will be similar to the 1997 computation. Gains prior to May 6,
2003 will normally be taxed at the then existing rates and only new
gains will be taxed at the new lower rates.
The Alternative Minimum Tax adjustment for the §1202 exclusion
decreases from 42% to 7%, effective with dispositions after May 5,
2003." (From "Highlights of Jobs & Growth Tax Relief Reconciliation
Act of 2003" by David L. Mellem, EA, published IRS News, AskTaxMama,
May 30, 2003")
- http://taxmama.com/IRSnews/053003.html
3. Sunset of title -
====================
The provisions for dividends will not apply after tax year 2008. (IRS
"Summary of Provisions in the Jobs & Growth Tax Relief Reconciliation
Act of 2003", June 20, 2003)
- http://www.irs.gov/businesses/small/article/0,,id=110431,00.html
4. Summary -
============
For 2003 and 2004, married taxpayers filing jointly will pay double
the rate for an individual in the 15% tax bracket, and reverts for
years 2005 and beyond.
Taxable amounts for the 10% tax bracket are increased for 2003 and
2004, and then revert to present rates.
The standard deduction for married taxpayers filing jointly is double
the individual rate, and reverts for years 2005 and beyond.
Dividends will be taxed at the same rates as capital gains. The 10%
rate on dividends decreases to 5% (0% in tax years beginning after
2007); the 20% rate decreases to 15%.
Tax computations for years that include May 6, 2003 will be similar to
the present computation and only new gains will be taxed at the new
lower rates.
The break for dividends will sunset for years after 2008; and all tax
relief provisions of the Jobs & Growth Tax Relief Reconciliation Act
of 2003 will disappear after 2010.
Articles Summarizing the Act -
============================
* The American Institute of Certified Public Accountants,
Congress Passes Jobs and Growth Tax Relief Reconciliation
Act of 2003
- http://www.aicpa.org/news/2003/052303.asp
* U. S. Treasury Chart, Jobs and Growth Tax Relief Reconciliation
Act of 2003 (Relative to Major Individual Income Tax Provisions
In Effect for 2003)
- http://www.treasury.gov/press/releases/reports/js4092.pdf
* IRS Digital Daily, "Summary of Provisions in the Jobs & Growth
Tax Relief Reconciliation Act of 2003" June, 20, 2003
- http://www.irs.gov/businesses/small/article/0,,id=110431,00.html
* Deloitte & Touche, Jobs & Growth Tax Relief Reconciliation Act
of 2003, June 2003
- http://www.deloitte.com/dtt/cda/doc/content/NAV4-Jun2003.pdf
Search terms used:
==================
- Jobs & Growth Tax Relief Reconciliation Act of 2003
- IRS + Jobs & Growth Tax Relief Reconciliation Act of 2003
The Act is a bit tedious to get through, but I think this answers the
questions you posted; however, if you have any questions about the
Answer, feel free to post a Request for Clarification, and I will be
happy to respond.
Regards,
Serenata |
Clarification of Answer by
serenata-ga
on
31 Jul 2003 16:55 PDT
----<MARRIED FILING JOINTLY>-----------------
TAX CUT
AFFECTED ITEM 2002 2003 THROUGH SINGLE HOH
============== ======= ======= ======= ======== =======
10% Bracket $12,000 $14,000 2004 $7,000 $10,000
15% Bracket 46,700 56,800 " 28,400 38,050
25% Bracket --- 114,650 " 68,800 98,250
27% Bracket 112,850 --- --- --- ---
28% Bracket --- 174,700 " 143,500 159,100
30% Bracket 171,950 --- --- --- ---
33% Bracket --- 311,950 " 311,950 311,950
35% Bracket 307,050 Over Over Over
311,950 " 311,950 311,950
38.6% Bracket Over --- --- --- ---
307,050
Beginning after December 31, 2002, tax rates (brackets) in the higher
income levels are 25%, 28%, 33%, and 35%. These rates do not change.
After 2004, married filing jointly will not be 200% of single
individuals (as it is for 2003 and 2004), but will revert to the
following amounts:
180% of the amount for single individuals for 2005
187% of the amount for single individuals for 2006
193% of the amount for single individuals for 2007
_______________________________________________________________________
Standard Deduction
==================
2003 2002 Good Through
Married, filing joint $9,500 $7,850 12/31/2004
Head of household 7,000 6,900 "
Single 4,750 4,700 "
For tax years 2003 and 2004, the standard deduction for married filing
jointly individuals is 200% of the standard deduction for single
individuals.
Then 174% for 2005,
184% for 2006,
187% for 2007,
and 190% for 2008 are still effective.
In effect, this means a decrease in the standard deduction for the
years 2005-2008 when compared to 2003 & 2004.
_______________________________________________________________________
I trust the layout above explains the 174%, 184%, 187% and 190% for
deductions and the 180%, 187% and 193% for tax rate for married filing
jointly.
If not, it refers to the rate for individuals, which is doubled (200%)
for married filing jointly, and then reverts after 2004 to the amounts
shown above.
Source:
Small Biz "Corporate and Individual Tax Rates"
- http://www.smbiz.com/sbrl001.html#pis03
Regards,
Serenata
|
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