The bad news? All of these much-touted provisions expire in 2010.
Last year's Economic Growth and Tax Relief Reconciliation Act of 2001 (HR 1836), or EGTRRA, contains 85 major provisions and more than 400 changes to the tax code.
Ken Haffey, managing partner of CBIZ, says the recent changes have received a lot of press and awareness among consumers.
"It has made everyone more aware of taxes, even my 70-year-old mother," he says. Much of that arrived in the form of a rebate check. "People are more aware because they received a check or because they didn’t receive one."
While the changes are significant, there are some simple truths. Both ends of the tax bracket spectrum will see incremental cuts. The 15 percent tax bracket, currently the lowest, dips down to 10 percent. By 2006, the 39.6 percent bracket slowly slides down to 36 percent.
If you're engaged to be married and have cold feet, just tell your intended that you want to wait until 2005 when the "marriage penalty" is lessened.
"The standard deduction for married couples will increase beginning in 2005, doubling the amount for singles," explains Haffey. In addition, the 15 percent bracket also expands for married couples, surpassing the bracket for single taxpayers.
It won't exactly be profitable to have children, but tax credits will double to $1,000 a head by 2010. The income ceiling is being raised from $75,000 to $150,000, and the dependent car credit will rise to 35 percent. The law also allows for childcare deductions for those taxpayers affected by the Alternative Minimum Tax (ATM).
The changes aren't exactly Earth shattering, but they will affect many people.
"A lot of dialogue has been given to this and you might expect more of a change but it is a step in the right direction," says Haffey.
How to reach: CBIZ Business Solutions of Cleveland Inc., (216) 525-1099.