113 Maple Road — Lexington, SC 29073 — Phone: 356-1963

The Family Tax Provisions have been extended.
  1. Child tax credit
    Increased to $1,000 per qualifying child.
    This keeps the $1,000 level through 2010.
  2. Marriage penalty relief
    Increased standard deduction continues at double the single rate through 2010.
    Increased 15% tax bracket ceiling continues at double the single rate through 2010.
  3. 10% rate bracket
    The $7,000 (single) and $14,000 (Married filing jointly) levels continue through 2007 before they decrease back to the former levels ($6,000-Single, $12,000-MFJ).
  4. Increase in refundable Child Tax Credit
    The scheduled increase in the refundable portion to 15% (from 10%) was to take place starting in 2005. Now this starts with 2004 tax returns. The $10,000 base remains at the $10,000 level.
    Any combat pay excluded from income is considered earned income for purposes of the refundable child tax credit effective with years beginning on or after January 1, 2004.
  5. Alternative Minimum Tax relief
    The current provision of a higher exemption amounts scheduled to end after 2004 is now extended through 2005.
  6. Earned Income Tax Credit & Combat Pay
    The combat pay excluded under §112 is not earned income under old law. Now the taxpayer can elect to treat excluded combat pay as earned income starting with years ending in 2004 and 2005 (before January 1, 2006). The process for this election is not identified in the law, so will be coming from the IRS.
  7. Head of Household status
    In order to claim HOH status, the taxpayer's home must be the home of a qualifying child. If the child is married, the taxpayer has to be able to claim the child in order to receive HOH status.
  8. Deduction for Certain Expenses of School Teachers
    Retroactively extended to December 31, 2005.
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