2001 Income Tax Update

The following important changes have been made for 2001 to the income
tax laws

Tax rates and brackets - The 2001 Tax Act created a new 10% bracket
that will be included in the tax tables for 2002 and later years. for 2001,
the benefit of the 10% bracket was given to the taxpayers through the
advance payment checks mailed out by the IRS or is available as a rate
reduction credit claimed on your 2001 tax return. THIS IS WHY WE MUST
VERIFY THAT YOU RECEIVED YOUR 2001 TAX REBATE.

The standard deduction has increased to $4,550 for singles, to $6,650 for
heads of household, to $3,800 for married persons filing separately and to
$7,600 for joint returns and qualifying widow(er)s.

The personal exemption deduction is $2,900 (up from $2,800) subject to
the phase-out rules for high income taxpayers.

First year depreciation (section 179) has increased on business equipment
placed in service in 2001 to $24,000 up from $20,000 in 2000.

The child tax credit is increased $100 to $600. Again this is subject to
phase out for high income taxpayers.

The AMT exemption has increased in 2001 to $49,000 for married
taxpayers, $35,750 for single and head of household taxpayers and
$24,500 for married persons filing separately. These new exemptions will
remain in place through 2004 as the law presently stands.

VERY IMPORTANT- If the name and social security number of a spouse on a
joint tax return does not match Social Security Administration records, a
personal exemption for that spouse is generally disallowed. If you fall into
this catagory, contact social secuiryt and get form SS-5. The SSA website
is www.ssa.gov or call 1-800-772-1213.

For 2001 the business milegate rate is 34.5 cents per mile

For 2001 maximum student loan interest deductible is $2,500 (up from
$2,000).

Self employment earnings up to $80,400 are subject to self employment
tax, this is up from $76,200 for 2000.

The estimated tax safe harbor is now 112% of the prior year's tax
compared with 110% for the year 2001.