Financial FAQ
When will the IRS mail the checks for the “advance child tax credit?” The 2003 Tax Act increased the credit from $600 to $1,000 per qualifying child and directed that taxpayers receive the increase this summer, rather than waiting until they file their 2003 Form 1040 in 2004.
When will my employer implement the new withholding tables that reflect the lower tax rates for 2003?
When are the new tax rates on dividend income (maximum rate of 15%) and long-term capital gains (maximum rate of 15%, with some exceptions) effective?
Do all dividends received by individual taxpayers after 2002 qualify for the reduced tax rates?
Do you have a tax, financial, retirement, investment or education planning question that you think should be on this FAQ? If you do, feel free to contact us.
When will the IRS mail the checks for the “advance child tax credit?” The 2003 Tax Act increased the credit from $600 to $1,000 per qualifying child and directed that taxpayers receive the increase this summer, rather than waiting until they file their 2003 Form 1040 in 2004.
The initial checks for those taxpayers that filed their 2002 Form 1040 by 4/15/2003 are being mailed out as follows: If the last two digits of your social security number are: 00-33 – July 25, 34-66 – August 1, 67-99 – August 8. If you filed after 4/15/2003, you will receive your payment after the IRS processes your 2002 Form 1040.
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When will my employer implement the new withholding tables that reflect the lower tax rates for 2003?
Employers should use the new tables no later than July 1, 2003. The tax rate changes are retroactive to the beginning of 2003. The new tables do not provide for the fact that withholding has already occurred, for the first half of 2003, at higher rates than required under the new law. Generally, taxpayers will receive a refund of the over withholding when they file their 2003 Form 1040 in 2004.
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When are the new tax rates on dividend income (maximum rate of 15%) and long-term capital gains (maximum rate of 15%, with some exceptions) effective?
The new rates relative to dividend income is effective for dividends received beginning January 1, 2003 and the new rates with regard to long term capital gains is effective for qualifying dispositions made after May 5, 2003.
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Do all dividends received by individual taxpayers after 2002 qualify for the reduced tax rates?
No! A qualified dividend is eligible for the reduced tax rate if it is: Common or preferred stock of domestic corporations; and received from qualified foreign corporations (those with stock traded on US markets or those whose income tax treatment is governed by a treaty with the US). Also, some dividends on certain preferred stock may not qualify. Mutual fund dividends are generally treated as qualifying, with some exceptions. Real estate investment trust (REITS) dividends qualify, also with some exceptions. Dividends received while in tax-qualified retirement plans and annuities including payments from IRAs, Roth IRAs, 401(k) plans, and thrift plans are ineligible.
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