Wednesday, January 21, 2004
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Wednesday, January 21, 2004 |
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What’s in store for filing your 2003 tax return? Liberty Tax Service reminds you that there are changes in tax rate brackets, capital gains, and retirement account contributions. Taxpayers may be able to take advantage of an increase in the education credit amount and several new measures concerning self-employed health insurance. “Although it’s not a big year for tax changes, the changes in the tax rates alone can prove to be a benefit,” said Jim Babb of Liberty Tax Service in Fayetteville. • Tax rate changes The 10 percent and 15 percent rates have been expanded. The 27 percent rate has decreased to 25 percent. The 30 percent rate has decreased to 28 percent. The 35 percent rate has decreased to 33 percent. The 38.6 percent rate has decreased to 35 percent. • Capital gains Those who had stock transactions this year may find the capital gain rate change significant. For sales after May 5, 2003, the maximum tax rates for net capital gains have decreased from 20 percent to 15 percent or from 15 percent and 10 percent to 5 percent. • IRAs and retirement plans. Liberty Tax Service reminds you that your traditional IRA deduction may be phased out if you are covered by an employer’s retirement plan. The modified AGI phase-out range has increased to $60,000-$70,000 for a married couple, and $40,000 to $50,000 for single or head of household taxpayer. If one spouse is not covered at work by an employer plan, he or she may be able to deduct the full amount. Taxpayers can contribute $12,000 to an employer’s retirement plan through salary reductions, $14,000 for those age 50 or over. SIMPLE plan contribution limit is $8,000; $9,000 for those age 50 or over. • Changes in education credits. The nonrefundable lifetime learning credit for payments made for qualified tuition and related expenses |
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