Contents & Introduction

Contents
Introduction . . . . . . . . . . . . . . . . . . . . .  1
Chapter
1. Tax Changes for Individuals  . . . . . . . . . . . . 2
2. Tax Changes for Businesses   . . . . . . . . . . . . 11
3. IRAs and Other Retirement Plans      . . . . . . . . 14
4. Estate and Gift Taxes . . . . . . . . . . . . . .    20
5. Excise Taxes . . . . . . . . . . . . . . . . . . . . 21
6. Foreign Issues . . . . . . . . . . . . . . . . . . . 22
7. How To Get Tax Help . . . . . . . . . . . . . . . .  22
Index . . . . . . . . . . . . . . . . . . . . . . . . . 24

This publication highlights tax law changes that take effect in 2001, 2002, and later years. The chapters are divided into separate sections based on when the changes take effect.

During 2001, many changes to the tax law were considered by Congress. Several of our publications and instructions to tax forms contained Cautions about possible changes in the law. The changes to the law that Congress made are explained in this publication.

Many of the changes discussed in this publication resulted from the Economic Growth and Tax Relief Reconciliation Act of 2001. The Act included a sunset provision in order to comply with the Congressional Budget Act of 1974. This provision states that the changes from the Act will not apply in tax years beginning after 2010 unless extended by future legislation.

Some of the changes covered in this publication include the following.

• Tax rate reductions.
• Changes to various credits including the earned income credit, adoption credit, and child tax credit.
• Changes to the student loan interest deduction.
• Changes to estate tax rates over the next few years and the eventual repeal of estate taxes.
• Increase in the allowable amount of individual retirement arrangement (IRA) contributions.
• Higher contribution and benefit limits for retirement plans.
• Additional contributions to retirement plans allowed for those age 50 and over.

See the discussion of each topic for more information.

Adjusting your withholding or estimated tax payments for 2002. If your tax for 2002 will be more or less than your 2001 tax, you may need to adjust your withholding or estimated tax payments accordingly. If your tax will decrease, you can get the benefit of lower taxes throughout the year. If you will owe more tax, you can avoid a penalty when you file your tax return.

See the following table for forms and publications that will help you adjust your withholding or estimated tax payments. See chapter 7 for information on ordering forms and publications.

To adjust your   Form               Publication
Withholding      W-4, Employee�s    919, How Do I 
                 Withholding        Adjust My Tax 
                 Allowance          Withholding?
                 Certificate

Estimated tax    1040-ES,           505, Tax 
payments         Estimated Tax for  Withholding and 
                 Individuals        Estimated Tax

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1–800–THE–LOST (1–800–843–5678) if you recognize a child.

Comments & suggestions. We welcome your comments about this publication and your suggestions for payment future editions.

You can e-mail us while visiting our web site at www.irs.gov.

You can write to us at the following address:

Internal Revenue Service 
Technical Publications Branch 
W:CAR:MP:FP:P 
1111 Constitution Ave. 
NW Washington, DC 20224

We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.

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