Sunset and the Economic Growth and Tax Relief Reconciliation Act of 2001

In 2001, President Bush signed a tax law that made changes to the Internal Revenue Code. This law included several provisions, such as temporary tax cuts that would expire in 2011 unless new legislation was passed to make them permanent. The law also created a new 10 percent tax bracket and gradually reduced tax rates for higher income brackets over five years. This was done to lessen the immediate impact on the federal budget. Tax laws have a “marriage penalty” that makes married couples pay more in taxes than two single people with the same income. To fix this, the tax act allows married couples to use a higher standard deduction. This helps reduce the extra taxes they have to pay. For example, if John and Sarah got married in December 2009, they wouldn’t get a tax break by waiting until January 2010. This is because they would get the same deduction either way. Congress passed a tax law in 2001 to help married couples and encourage people to save more for retirement. They fixed a problem with taxes for married couples and made it easier for people to save in retirement accounts like IRAs and 401(k) plans. They also made it so that people over 50 could save even more money in their retirement accounts. Overall, the new tax law made it better for couples and for saving for the future. In 2002, Sam is 50 years old and can contribute $12,000 to his retirement plan. The new tax act provides benefits for taxpayers, but they may disappear in the future. It’s a good idea for taxpayers to take advantage of these benefits while they can.

Source: https://www.floridabar.org/the-florida-bar-journal/sunset-and-the-economic-growth-and-tax-relief-reconciliation-act-of-2001/