The tax cut has been all over the news lately as the government tries to jump-start our ailing economy. The theory is that if more money is given back to taxpayers, we will spend more, which will in turn stimulate the economy.
The biggest news was the increased child tax credit. According to the IRS website, "The maximum child tax credit has increased from $600 to $1,000 per child. Beginning on July 25, 2003, checks will be mailed to taxpayers who claimed the child tax credit for 2002."
But what does this mean for the child free?
Well, obviously we aren't going to get a child tax credit, unless the IRS starts counting cats and dogs. But we ARE going to see some tax relief.
According to Accountant Michael Vanderhoof, the so-called "marriage penalty" is a thing of the past. "The standard deduction for married filing joint has been increased to twice that of the single deduction – $4750 for single, $9500 for married filing joint," he says. "The 15% rate bracket for married taxpayers filing jointly and qualifying widow(er)s has expanded to twice that of single filers. This should totally nullify any marriage tax penalty."
So we are included in all of this tax talk, then.
No one can argue that a tax break for families is a good idea. But it does sound a bit exclusive. Especially the way it is worded in another article on the IRS website: "This summer, the check is in the mail. Really! Your kids could be the reason you get a special check from the government. And, best of all, you do not have to do anything. The IRS will do it all and send it straight to your mailbox. Automatically!"
"Your kids may be the reason." Interesting, since child free couples traditionally spend more money on things like vacations, luxury items, and other big ticket items than families do, which sounds like a pretty good way to stimulate the economy to me.
Still, you may notice your next paycheck is a little more than it used to be. That’s because of the Jobs and Growth Tax Relief Reconciliation Act of 2003, which lowered the tax rates employers use when figuring federal income tax withholdings based on wages. The tax rate brackets of 27%, 30%, 35%, and 38.6%, have been reduced to 25%, 28%, 33%, and 35%, respectively.
It isn't much, but at least married couples are no longer penalized for simply being married.
Now, who can we talk to about tax deductions for cats?