Tax Relief

legislation designed to extend a variety of tax breaks for individuals and businesses and simplify certain parts of the tax code. Some of the most important provisions of the law include:

1. Continuing the child tax credit at $1,000 for 2005 through 2009.
2. Full marriage penalty relief for the basic standard deduction.
   In 2005 through 2008, the basic standard deduction amount for married joint filers is double the standard deduction for single taxpayers. Also, full marriage penalty relief for those in the 15% tax bracket.
3. Repeal of the reduction in the 10% tax bracket for 2005 through 2010. The 10% bracket applies to the first $7,000 of taxable income for singles and the first $14,000 of taxable income for married couples filing jointly, and the first $10,000 of taxable income for those filing as heads of household.
4. No rollback in 2005 AMT exemptions for individuals. The Alternative Minimum Tax exemption amount for individuals is increased to $58,000 for married couples filing jointly and $40,250 for singles.
5. Uniform definition of a child. In the past, there were many definitions of a child for various tax purposes that were all unified into one definition based on a test of residency, relationship, and age. This applies for the purpose of the dependency exemption, child credits, earned income credits, dependent care credits, and head of household filing status.
6. Research credit extended through 2005.</li><li>Work opportunity and welfare-to-work tax credits extended through 2005.</li><li>Energy incentives extended through 2005. This applies to credits for electric vehicles, clean fuel properties, and production of electricity from renewable resources such as wind and biomass.