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Washington, D.C. - They say two things in life are certain, and one of those things will darken the door of millions of American households over the next three weeks.
As those last-minute filers set down this year to find out how much Uncle Sam will be taking from them, I thought this would be a good time to point out a few of the changes that you'll see on your tax returns this year.
A few changes are a result of the tax relief we passed in Congress in 2001 and 2003:
! The individual tax rates for all taxpayers has been reduced, which this year means marginal tax rates above 15 percent have been reduced across-the-board by two points to 25, 28, and 33 percent. The top rate is reduced to 35 percent.
! To provide marriage penalty tax relief, this year the standard deduction for joint filers and qualified widows has been increased by $1,650 to $9,500 - twice that of a single filer or a married person filing separately.
! The Child Tax Credit has been raised to $1,000 per child, an increase of $400. Most taxpayers using the credit received an advance payment of this increase during 2003 and must subtract that advance to receive the rest of the credit.
! The limit on the amount that an individual can contribute on a salary reduction basis to a 401(k), 403(b) and 457 plan has been increased from $11,000 to $12,000.
! The top tax rate for net capital gains on sales and other qualified dispositions after May 5, 2003, has been reduced from 20 to 15 percent and from 10 to 5 percent for low-income earners.
! Dividends paid after 2002 will now be taxed at the 15 or 5 percent rate (based on the individual's income) instead of the individual's marginal tax rate.
Reservists' Travel Penalty Fixed
In addition to these across-the-board changes, military reservists will now benefit from an expansion of their travel expense deduction as a result of a bill I voted for and was signed into law last year.
In years past, reservists could not deduct their travel expenses unless they itemized their deductions. Those claiming the standard deduction - which about two-thirds of all taxpayers use - were left out. But under this new law, reservists are allowed to deduct their overnight travel expenses, such as meals and lodging, even if they claim the standard deduction.
More than 23,000 reservists in Oklahoma will benefit from this expanded tax break. Those who are willing to leave the safety of their everyday lives in order to defend this country should not be financially penalized for the costs of the travel associated with their training.
Where's My Refund?
This is by far the most popular tax question I hear, from those who have already filled out their returns and are expecting a refund. You can find out the status of your refund by going online to the IRS secure site at www.irs.gov and click on "Where's my Refund?" to find out if the IRS received your return and whether your refund was processed and sent to you. You'll need to provide your Social Security number, your filing status, and the refund amount.
Free Tax Help
To help taxpayers deal with the many forms and schedules, the Internal Revenue Service has established offices across Oklahoma to assist them, including offices in the Third Congressional District. Priority is given to those with special needs, such as the elderly or those with disabilities or low incomes.
These Volunteer Income Tax Assistance, or VITA sites, have trained volunteers that help prepare federal and Oklahoma tax forms for taxpayers with typical returns. To find the site nearest you, call the IRS at 1-800-829-1040 and ask for the nearest VITA site. They will input your zip code and let you know which site serves your area.
For more information on tax laws, the IRS tax help line is 1-800-829-1040. Or you can access information on the IRS website, at www.irs.gov. |
