|
Here's a
quick review of some of the tax changes you'll see from 2002 to 2003 as
a result of inflation adjustments and tax law changes.
|
| Provision |
2003
|
2002
|
|
| Business equipment expensing deduction | $100,000 |
$24,000
|
|
| Bonus depreciation | 30% - 50% | 30% | |
| Percent of health insurance deductible by self-employed individuals | 100% |
70%
|
|
| Standard mileage rate for business driving | 36¢ per mile |
36.5¢ per
mile
|
|
| Mileage rate for medical and moving expense deductions | 12¢ per mile |
13¢ per mile
|
|
| Mileage rate for charitable driving | Unchanged | 14¢ per mile | |
| Luxury excise tax on new cars / Excess to which tax applies | Tax eliminated |
3%
/ $40,000
|
|
|
Prior-year
safe harbor for estimated taxes of higher-income individuals |
110% of prior year's tax liability |
112%
of prior year's tax liability
|
|
| Adoption credit | $10,160 |
$10,000
|
|
| Maximum wages subject to social security tax | $87,000 |
$84,900
|
|
| Social security earnings limit |
|
||
|
-
|
Under age 65 | $11,520 |
$11,280
|
|
-
|
65 and over | No limit |
No limit
|
| Estate tax exemption | Unchanged |
$1,000,000
|
|
| Top estate tax rate | 49% |
50%
|
|
| Annual gift nontaxable limit | Unchanged |
$11,000 per
donee
|
|
| Maximum retirement plan contributions |
|
||
|
-
|
IRA for those under age 50 | Unchanged |
$3,000
|
|
-
|
IRA for those 50 and over | Unchanged |
$3,500
|
|
-
|
SIMPLE plan for those under age 50 | $8,000 |
$7,000
|
|
-
|
SIMPLE plan for those 50 and over | $9,000 |
$7,500
|
|
-
|
401(k) plan for those under age 50 | $12,000 |
$11,000
|
|
-
|
401(k) plan for those 50 and over | $14,000 |
$12,000
|
| Tax credit for retirement plan contributions made by lower-income taxpayers | Unchanged |
From 10%
to 50%
of the first
$2,000 contributed
|
|
| Employers can establish "deemed IRAs" within company plans | Permitted | N/A | |
| Maximum dependent care credit (child care credit) | 35% |
30%
|
|
| Maximum expenses eligible for dependent care credit | |||
|
-
|
One qualifying individual | $3,000 |
$2,400
|
|
-
|
Two or more qualifying individuals | $6,000 |
$4,800
|
| Maximum lifetime learning credit | $2,000 |
$1,000
|
|
|
Nanny tax threshold |
$1,400 |
$1,300
|
|