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When:
January 01, 2003
Who it Affects:
All tax payers
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2003 Tax Law Changes
Lower tax rates and expanded 10% bracket
The 2003 tax bill cut rates for most taxpayers, and that could mean big savings for you.
New rates
The new law accelerates the reduction in the top tax rates that was planned for 2006. The current 10% and 15% rates would be preserved, with the higher tax rates reduced as follows:
- The 27% rate originally scheduled for 2003 becomes 25%.
- The 30% rate originally scheduled for 2003 becomes 28%.
- The 35% rate originally scheduled for 2003 becomes 33%.
- The 38.6% rate originally scheduled for 2003 becomes 35%.
Expanded 10% bracket
In addition, the amount of income subject to the 10% bracket was expanded from $6,000 to $7,000 for singles and $12,000 to $14,000 for married couples filing jointly. Of course, there's a glitch in the tax law. The rates are scheduled to expire in 2011. Here's how the new rates and brackets work this year:
| New tax rates and schedules for 2003 | | If your taxable income is over | But not over | Your tax is this | Plus this % | Of the excess over | | Single | | | | | | $0.00 | $7,000 | 0 | 10% | 0 | | $7,000.00 | $28,400 | $700.00 | 15% | $7,000 | | $28,400.00 | $68,800 | $3,910.00 | 25% | $28,400 | | $68,800.00 | $143,500 | $14,010.00 | 28% | $68,800 | | $143,500.00 | $311,950 | $34,926.00 | 33% | $143,500 | | $311,950.00 | -- | $90,514.50 | 35% | $311,950 | | | | | | | Married filingjointly orwidow(er)* | | | | | | $0.00 | $14,000 | 0 | 10% | 0 | | $14,000.00 | $56,800 | $1,400.00 | 15% | $14,000 | | $56,800.00 | $114,650 | $7,820.00 | 25% | $56,800 | | $114,650.00 | $174,700 | $22,282.50 | 28% | $114,650 | | $174,700.00 | $311,950 | $39,096.50 | 33% | $174,700 | | $311,950.00 | -- | $84,389.00 | 35% | $311,950 | | | | | | | Married filing separately | | | | | | $0.00 | $7,000 | 0 | 10% | 0 | | $7,000.00 | $28,400 | $700.00 | 15% | $7,000 | | $28,400.00 | $57,325 | $3,910.00 | 25% | $28,400 | | $57,325.00 | $87,350 | $11,141.25 | 28% | $57,325 | | $87,350.00 | $155,975 | $19,548.25 | 33% | $87,350 | | $155,975.00 | -- | $42,194.50 | 35% | $155,975 | | | | | | | Head of household | | | | | | $0.00 | $10,000.00 | 0 | 10% | 0 | | $10,000.00 | $38,050.00 | $1,000.00 | 15% | $10,000 | | $38,050.00 | $98,250.00 | $5,207.50 | 25% | $38,050 | | $98,250.00 | $159,100 | $20,257.50 | 28% | $98,250 | | $159,100.00 | $311,950.00 | $37,295.50 | 33% | $159,100 | | $311,950.00 | -- | $87,736.00 | 35% | $311,950 |
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2004 rates and brackets
We know readers want to start their planning for 2004. So, here are the rates and brackets for 2004
| New tax rates and schedules for 2004 | | If your taxable income is over | But not over | Your tax is this | Plus this % | Of the excess over | | Single | | | | | | $0.00 | $7,150 | 0 | 10% | 0 | | $7,150.00 | $29,050 | $715.00 | 15% | $7,150 | | $29,050.00 | $70,350 | $4,000.00 | 25% | $29,050 | | $70,350.00 | $146,750 | $14,325.00 | 28% | $70,350 | | $146,750.00 | $319,100 | $35,717.00 | 33% | $146,750 | | $319,100.00 | -- | $92,592.50 | 35% | $319,100 | | | | | | | Married filing jointly or widow(er)* | | | | | | $0.00 | $14,300 | 0 | 10% | 0 | | $14,300.00 | $58,100 | $1,430.00 | 15% | $14,300 | | $58,100.00 | $117,250 | $8,000.00 | 25% | $58,100 | | $117,250.00 | $178,650 | $22,787.50 | 28% | $117,250 | | $178,650.00 | $319,100 | $39,979.50 | 33% | $178,650 | | $319,100.00 | -- | $86,328.00 | 35% | $319,100 | | | | | | | Married filing separately | | | | | | $0.00 | $7,150 | 0 | 10% | 0 | | $7,150.00 | $29,050 | $715.00 | 15% | $7,150 | | $29,050.00 | $58,625 | $4,000.00 | 25% | $29,050 | | $58,625.00 | $89,325 | $11,393.75 | 28% | $58,625 | | $89,325.00 | $159,550 | $19,989.75 | 33% | $89,325 | | $159,550.00 | -- | $43,164 | 35% | $159,550 | | | | | | Head of household | | | | | | $0.00 | $10,200 | 0 | 10% | 0 | | $10,200.00 | $38,900 | $1,020.00 | 15% | $10,200 | | $38,900.00 | $100,500 | $5,325.50 | 25% | $38,900 | | $100,500 | $162,700 | $20,725 | 28% | $100,500 | | $162,700.00 | $319,100 | $38,141 | 33% | $162,700 | | $319,100.00 | -- | $89,753 | 35% | $319,100 |
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*Sometimes called "qualifying" widow or widower. This filing status is available for two years following the year of a spouse's death and basically applies the filing data afforded married joint filers.
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