One good thing about the tax cuts in the new law is that most people won't
have to wait long to start seeing the savings. Employers have generally lowered
the amount of federal tax withheld from their workers’ paychecks, reflecting lower
tax rates for most people and a larger standard deduction for married couples.
The Treasury is mailing checks to most people who claimed the Child Tax Credit
last year, as an advance payment of the credit’s increase. If you claimed this
credit on your 2002 tax return, you may be eligible for up to $400 for each
qualifying child. That’s the difference between the old maximum credit of $600
and the new amount of $1,000.
You do not have to do anything to get these benefits. Your employer adjusts
your paycheck withholding based on the W-4 form you had on file. The IRS will
figure if you’re entitled to any advance Child Tax Credit payment and have it
sent straight to your mailbox – automatically! You don’t have to call, apply or
fill out another form.
Some other changes aren’t so automatic, but could also mean extra money in
your pocket. Lower tax rates for long-term capital gains and qualifying
dividends may allow you to reduce your estimated tax payments for the rest of
the year. An increase in the Alternative Minimum Tax exemption may insulate you
from that computation. Business owners may claim larger first-year depreciation
allowances and Section 179 expensing amounts.