Tax Cuts Yield Big Refunds

ByABC News
February 23, 2004, 12:24 PM

— -- The new tax changes offer something for almost everyone.

Don Roberts of the Internal Revenue Service says that's because rates are down.

"Those who were in the higher tax rates 25, 38, 33, and 35 percent, now the top rates they were all two percentage points higher last year. And the top rate was 3.6 percentage points higher," said Roberts.

The tax on dividends has been slashed from a high of nearly 40 percent to just 15. The standard deduction for married couples has been raised and their tax brackets adjusted, as well.

"For many couples, this effectively eliminates the old marriage penalty," Roberts said.

The tax cuts passed this year were retroactive, taking effect January 1, 2003. This should mean bigger refund checks, although many low-income tax payers may not see any changes.

New York tax specialist Ginger Broderick says she'll be busier than ever this year, thanks to the tax changes.

"The more simple it gets, the more complicated it gets," she said.

Click here for interactive tax explainers and calculators