Here goes: Starting on July 1, 2001, will the income tax taken out be less due to the tax changes OR will we have to wait until we file for the decrease?The Withholding rates are reduced as of 7/1/01. See prior reply for link address. Theoretically the new withholding rates for 1/2 the year will produce the 1/2% difference for the full year, so they are 1% lower and should be the same in 2002 ( except that the brackets are fudged for inflation so they will be different anyway). My understanding from reading the other posts is there will be a 1/2% difference (from 28 to 27 1/2%) for the remainder of the year for that tax bracket, and after this year that will be a full 1% decrease.When you figure your taxes for 2001 you will pay 27 1/2%, 30 1/2% etc. for your full year's income, the presumption being that you earned 1/2 by 7/1/01 and 1/2 for the rest of the year (to keep the bookkeeping simple for a 1% drop in rates for the last half of the year). edddIn 2002 yyou get the full 1% drop fro the full year.
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