With new tax brackets, now's the time to lower your withholding.
Barrels of media ink have been spilled over the 25 million checks Uncle Sam mailed out as advance refunds on the 2003 child tax credit. Plenty of attention has been given to other aspects of the so-called Jobs and Growth Tax Relief Reconciliation Act of 2003, too, including dividend and capital gains cuts and increased deductions for business owners. But little notice has been paid to the one thing that almost all taxpayers can do immediately to take advantage of the legislation- the withholding from their paychecks to reflect new, lower marginal tax brackets.
The tax bracket changes are relatively small, so the extra money in each paycheck won't be enough to overcome fiscal inertia in many households or to get the nation's financial advisers clamoring about the oversight. Still, if you don't make the change, you're paying the government too much money and will have to wait for your tax refund to get it back.
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