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Document Type

Peach Sheet

Abstract

The Act provides for changes in the income taxation of individuals by increasing both exemptions and deductions and makes prior law gender neutral. Beginning in the 1998 tax year, individuals filing a joint tax return may claim a $5400 exemption, while an individual filing separately may claim a $2700 exemption. Further, an individual may claim a $2700 exemption for each dependent until the 2003 tax year when the dependent exemption increases to $3000. In lieu of the personal exemption, an individual may claim an exemption of $2700 for an estate and $1350 for a trust. Further, the Act increases to $1300 the additional deduction allowed to taxpayers who reach the age of sixty-five before the close of the tax year and to taxpayers who are blind. Finally, the Act provides for withholding exemption increases in two areas: the personal withholding exemption for employees increased by approximately forty-five percent and the dependent withholding exemption increased by approximately eight percent.

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