1. Child tax credit: The child tax credit has been increased from $600 to $1,000 through 2010. Starting in 2010, the tax credit returns to the level originally passed in the 2000 tax bill. The credit is, however, still phased out for higher incomes.

2. Marriage penalty relief: The new law makes the standard deduction for married couples filing jointly and qualified widowers to be double that of single tax filers. This puts the standard deduction for 2006 at $10,300. In addition to the increased standard deduction, the 15% tax bracket has been increased for married tax filers to further reduce the impact of the marriage penalty.

3. Lower tax rates: Below are the resulting tax rates and income ranges for 2006:

   Filing Status and Income Tax Rates 2006 Caution: Do not use these tax rate schedules to figure 2005 taxes. Use only to figure 2006 estimates.
   Tax rate	Married filing jointly or Qualified Widow(er)	Single	Head of household	Married filing separately
   10%	$0 - 15,100	$0 - 7,550	$0 - $10,750	$0 - 7,550
   15%	$15,101- 61,300	$7,551- 30,650	$10,751- 41,050	$7,551- 30,650
   25%	$61,301- 123,700	$30,651- 74,200	$41,051- 106,000	$30,651- 61,850
   28%	$123,701- 188,450	$74,201- 154,800	$106,001 171,650	$61,851- 94,225
   33%	$188,451- 336,550	$154,801- 336,550	$171,651- 336,550	$94,226- 168,275
   35%	over $336,550	over $336,550	over $336,550	over $168,275

   Source: IRS Revenue Procedure 2005-70 (http://www.irs.gov/pub/irs-drop/rp-05-70.pdf)

   
   
   

5. Reduced Taxes on Capital Gains: Capital gains tax rates remain at 5% and 15% respectively. These capital gains rates are for property that was held for at least one year. This calculator assumes that all of your long-term capital gains are taxed the new rates of 5% and 15%.

6. Reduced Taxes on Dividends: The new law applies the capital gains tax rates to qualified dividends paid from most U.S. corporations and certain qualified foreign corporations. This calculator assumes that all dividends are qualified, however, you should make certain that this is the case in your particular circumstance. All qualified dividends will appear in column 1b of Form 1099-DIV, which should be sent to you in January of the year following the dividend payment. Taxpayers in the 10% or 15% bracket pay a 5% rate of tax on dividends paid between January 1, 2003, and December 31, 2007, and zero percent in 2008. Taxpayers in tax brackets above 15%, pay a 15% rate of tax on dividends paid between January 1, 2003, and December 31, 2008.

7. Alternative Minimum Tax (AMT): The new tax law increased the AMT exemption for married filers to $58,000 for 2004 and 2005. It has also increased the AMT exemption to $40,250 for single filers for 2004 and 2005. However, it falls back to $45,000 for couples and $33,750 for singles in 2006. Please note that calculating the impact of AMT on your taxes is beyond the scope of this calculator. Please see your tax professional for assistance if you believe that you will be required to pay the AMT.

8. IRA and retirement plan deductions: The new tax law did not change IRA deduction and contribution limits. However, the 2000 tax code increased the amount for most individuals to $4,000 for 2006. Those over 50 can contribute $5,000.

Filing Status for 2006
Married filing jointly	If you are married, you are able to file a joint return with your spouse. If your spouse died during the tax year, you are still able to file a joint return for that year. You may also choose to file separately under the status "Married filing separately".
Qualified Widow(er)	Generally, you qualify for this status if your spouse died during the previous tax year (not the current tax year) and you and your spouse filed a joint tax return in the year immediately prior to their death. You are also required to have at least one dependent child or step child whom which you are the primary provider.
Single	If you are divorced, legally separated or unmarried as of the last day of the year you should use this status.
Head of household	This is the status for unmarried individuals that pay for more than half of the cost to keep up a home. This home needs to be the main home for the income tax filer and at least one qualifying relative. You can also choose this status if you are married, but didn't live with your spouse at anytime during the last six months of the year. You also need to provide more than half of the cost to keep up your home and have at least one dependent child living with you.
Married filing separately	If you are married, you have the choice to file separate returns. The filing status for this option is "married filing separately".