Good News for Taxpayers

Along with the tax rebate check you may have recently received from Uncle Sam, there's a more permanent change to your tax situation. Thanks to recently-enacted tax legislation, your take-home pay will be just a little bit more than it was before.

The most significant change is that the first $12,000 of income you earn, previously subject to a tax rate of 15%, is now subject to a 10% tax rate. That reduces your annual federal income tax burden by at least $600.

Beyond that, the changes are far more modest. The following table shows the old and new tax rates, and what changes are scheduled to take place in the future.

Even the modest reduction in tax rates provides you with more money you can put to work toward your retirement. Think about investing your tax savings to build a better future.

The changing schedule for Federal Tax Rates
Old Rate	New 2001 Rate	2002-2003	2004-2005	2006
15%*	10-15%*	10-15%*	10-15%*	10-15%*
28%	27.5%	27%	26%	25%
31%	30.5%	30%	29%	28%
36%	35.5%	35%	34%	33%
39.6%	39.1%	38.6%	37.6%	35%
Source: Internal Revenue Service *The first $12,000 of income is taxed at 10%, with the remainder of income within the 15% bracket taxed at a 15% rate. Those rates are not scheduled to change under the new law.

Content is for informational purposes only and may not accurately reflect your specific situation. Information is not intended to provide financial, legal, tax, or accounting advice. You should consult a qualified advisor for advice specific to your own circumstances.