Here are some of the other major changes the affect tax years beginning in 2003:

-The maximum tax rate on net capital gains has been reduced from 20% to 15%.  The rate for taxpayers in the 10% and 15% tax rate brackets has been reduced from 10% to 5%;

-The same 15% (or 5%) maximum tax rate that applies to net capital gains also applies to dividends received from most domestic and foreign corporations after December 31, 2002.  Certain dividends from regulated investment companies (such as mutual funds), real estate investment trusts (REIT’s), and certain foreign corporations do not qualify for the reduced rates.

-The special first-year depreciation for businesses has been increased from 30% to 50% for qualified property acquired after May 5, 2003.  Instead of claiming the 50% allowance, taxpayers may elect to claim the 30% allowance or elect not to claim any special allowance.  The depreciation limit for vehicles subject to the 50% allowance is increased by $7,650.