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The Changing Tax Law: Timeline for 2001, 2003, 2004, and 2005 Tax Act Provisions
| The 2001, 2003, 2004, and 2005 Tax Acts contained significant tax law changes that phase in and out over the coming years. All changes end in 2011 and the rules revert to the pre-2001 Tax Act rules, unless Congress again changes the law. To make your tax planning most effective, keep an eye on the calendar to see when various tax breaks begin and end. Use the timeline below to help you keep track of year-by-year changes in the main areas affected by these laws. | Capital Gains (Long-term)
| | | Provision | Prior
Law | 2001 | 2002 | 2003
(1/1-5/5) | 2003
( 5/6-12/31) | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | | Top tax rate for lower-bracket taxpayers | 10% | 5% | 0% | | Top tax rate for all other taxpayers | 20% | 15% | | Provision | Prior
Law | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | | Child tax credit | $500 | $600 | $1,000 | | Adoption credit | $5,000 | $10,000 | Limit indexed for inflation | | Expenses for dependent care credit | For 1: Up to $2,400
For 2 or more: Up to $4,800 | For 1: Up to $3,000
For 2 or more: Up to $6,000 | | Dependent care credit | Up to 30% | Up to 35% | | Credit for employer-provided child care facilities | N/A | 25% up to a maximum $150,000 per year | | Provision | Prior
Law | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | | Top rate for lower bracket taxpayers | Ordinary income rates | 5% | 0% | | All other taxpayers | Ordinary income rates | 15% | | Provision | Prior
Law | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | | Annual contribution limit for education savings accounts (Education IRAs) | $500 | $2,000 | | Income phase-out range for education savings accounts | Single:$95,000 - $110,000
Joint: $150,000 - $160,000 | Single:$95,000 - $110,000
Joint: $190,000 - $220,000 | | Tax-free withdrawals for education savings accounts | For higher education expenses | For elementary, secondary, and higher education expenses | | Above-the-line deduction for higher education expenses (subject to income limitations) | N/A | $3,000
(income limit $65,000 singles, $130,000 joint filers) | $4,000
(income limit $65,000 singles, $130,000 joint filers)
$2,000
(income limit $80,000 singles, $160,000 joint filers) | N/A | | Tax-free withdrawals from Section 529 plans | N/A | For state plans only | For both state and private plans | | Provision | Prior
Law | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | | Top rate | | 55% | 50% | 49% | 48% | 47% | 46% | 45% | Repealed | | Exemption amount | $675,000 | $1 Million | $1.5 Million | $2 Million | $3.5 Million | Repealed | | Provision | Prior
Law | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | | 10% tax bracket* | N/A | Singles - $6,000
Couples - $12,000
Heads of household - $10,000 | Singles - $7,000
Couples - $14,000 | | Tax rates | 15% | | 28% | 27.5% | 27% | 25% | | 31% | 30.5% | 30% | 28% | | 36% | 35.5% | 35% | 33% | | 39.6% | 39.1% | 38.6% | 35% | | Limit on itemized deductions | Itemized deductions are limited for higher-income taxpayers | Limit reduced by 1/3 | Limit reduced by 2/3 | Limit repealed | | Personal exemption phase-out | Personal exemptions are phased out for higher-income taxpayers | Phase-out reduced by 1/3 | Phase-out reduced by 2/3 | Phase-out repealed | | AMT exemption | $33,750 Single
$45,000 Joint | $35,750 Single
$49,000 Married filing jointly | $40,250 Single
$58,000 Married filing jointly | $42,500 Single
$62,550 Married filing jointly | $33,750 Single
$45,000 Married filing jointly | | * Amounts indexed annually for inflation | | Provision | Prior
Law | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | | Increase standard deduction for married couples to twice the deduction for singles | | Married couples standard deduction as a percent of the standard deduction for singles: | | | 167% | 200% | | Increase size of 15% bracket for married couples to twice the size of the 15% bracket for singles | | 15% tax bracket for married couples as a percent of the 15% bracket for singles: | | | 167% | 200% | | Provision | Prior
Law | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | | IRA contribution limit | $2,000 | $3,000 | $4,000 | $5,000 | Limit indexed for inflation | | IRA 50 & older catch-up contribution | N/A | $500 | $1,000 | | 401(k) deferral limit | $10,500 | $11,000 | $12,000 | $13,000 | $14,000 | $15,000 | Limit indexed for inflation | | 401(k) 50 & older catch-up deferral | N/A | $1,000 | $2,000 | $3,000 | $4,000 | $5,000 | Limit indexed for inflation | | SIMPLE deferral limit | $6,500 | $7,000 | $8,000 | $9,000 | $10,000 | Limit indexed for inflation | | SIMPLE 50 & older catch-up deferral | N/A | $500 | $1,000 | $1,500 | $2,000 | $2,500 | Limit indexed for inflation | | Tax credit for lower-income contributors to plans | N/A | From 10% to 50% of the first $2,000 contributed | | Roth option for 401(k) plans | N/A | Permitted | | Employers may establish "deemed IRAs" within the company's retirement plan | N/A | Permitted |
This page was last modified on September 28, 2006 09:37 AM |
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