ANSWERS: 1
  • President George W. Bush signed the Working Families Tax Relief Act of 2004 on Oct. 4, 2004. The law extended several income-tax-relief measures for middle-class taxpayers that had been set to expire.

    Highlights

    The act extended relief from the "marriage penalty" through 2010. It also extended the expanded 10 percent income-tax bracket and the $1,000 child tax credit through 2010. Legislators say the law saved taxpayers from a $109 billion tax increase over 10 years.

    Child Tax Credit

    The child tax credit, which was scheduled to be reduced, will remain at the 2004 level of $1,000 through 2010.

    Standard Deduction

    The act increased the basic standard deduction for joint tax returns to 200 percent of the basic standard deduction for single taxpayers. After 2010, the deduction for joint returns will be reduced to 167 percent of the basic standard deduction for single taxpayers.

    Teacher Expenses

    The $250 teacher-expense deduction, available for some expenses for elementary and secondary school teachers, was extended through 2005.

    Definition of a Qualifying Child

    The act established a universal definition of a "qualifying child" in order for taxpayers to claim certain related credits. The criteria include residency, relationship and age.

    Source:

    NYSSCPA.org

    CCH.com

    WaysAndMeans.House.gov

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