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Keeping up
with the tax law
Here’s a
review of some popular tax provisions that were extended beyond 2004 as a
result of the Working Families Tax Relief Act of 2004.
Marriage penalty relief: Congress voted to extend until
2010 a temporary provision that makes the standard deduction for married
couples twice that used by single taxpayers
The 10 percent tax bracket: Congress allowed the limits
on the 10 percent bracket to remain at higher levels and continue to be
indexed to inflation.
Alternative minimum tax: Congress passed a one-year
extension of an exemption designed to help provide relief from the
alternative minimum tax (AMT) for middle-income taxpayers. In 2005, the AMT
exemption is the first $58,000 of income for married couples filing jointly
and $40,250 for single filers. Barring the extension, the exemption amounts
would have fallen to $45,00 and $33,750, respectively.
Taxation with Expiration: Many of the recent-tax-law
provisions are slated to expire over the next several years they are:
Capital Gains Tax Rate Reduction, Dividend Tax Rate Reduction by 12/31/08,
and Income Tax Reduction, Child Tax Credit by 12/31/10.
Child credit the $1,000-per-child credit has been
extended through 2010. This credit had been scheduled to revert back to $700
in 2005
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