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2000 and 2001 - Year-End Tax Changes
Since this Congress was unable to decide on a tax bill, we will have very
little in the way of new tax laws to be concerned with. However, because of
prior-year legislation and other changes to the tax law, there are a number of
changes that are effective in 2000 and 2001.
 Business
Expenses
The maximum amount of depreciable business property that a taxpayer may
elect to expense under Code Section 179 has been increased from $19,000 in
1999, to $20,000 in 2000, and $24,000 in 2001.
The standard business mileage rate for the cost of operating a car has been
increased from 32.5 cents a mile during 2000 to 34.5 cents a mile for 2001.
Student
Loans Interest
The maximum amount of qualified student loan interest that taxpayers can
deduct has been increased from $1,500 in 1999 to $2,000 in 2000 and $2,500 in
2001.
Retirement
Plans, Pensions and IRAs.
Generally, a taxpayer covered by a retirement plan at work may deduct up to
$2,000 of contributions to an IRA, subject to limitations on modified adjusted
gross income (AGI). These AGI caps have been increased for 2000. Additionally,
earnings and contributions levels have also been increased for taxpayers
qualifying for SEP and other qualified retirement plans.
Earned
Income Credit
The maximum amount of income a taxpayer can earn and still get the earned
income credit has increased for 2000. An individual may be able to take the
credit if earnings are less than $31,152 (with more than one qualifying
child), $27,413 (with one qualifying child), and $10,380 (with no qualifying
children). The maximum amount of investment income an individual can have and
still be eligible for the credit has also increased to $2,400 in the year
2000.
Please contact our office at any time if you have any questions on how the
specific provisions of the Tax Act affects you, your family, your investments,
or your business.
Please note: This information is of a general nature
and is not intended to address the circumstances of any particular individual
or entity. No one should act upon such information without appropriate
professional advice after a thorough examination of the specific facts and
circumstances of the particular situation.
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