new tax law update whether investing kids education retirement new federal tax law may make goals easier reach 1 35 trillion tax relief package could affect finances many areas investing college retirement managing income estate taxes many tax cuts phase gradually next several years help take advantage possible provisions start planning soon ways may benefit include lower income tax rates gradual reduction tax rates already begun fact new withholding schedule went effect july 1 receive tax rebate check soon due creation new 10 bottom rate retroactive january 1 2001 tax rates fall next years disposable income likely rise offering opportunity invest toward various goals education funding incentives parents want help children attend college may find financial task easier tax relief act improve education savings tools education iras accounts contribution limit rise 500 2 000 2002 money accounts used elementary secondary school costs addition higher education expenses state sponsored 529 college savings plans also beginning 2002 distributions plans qualified education expenses tax free currently earnings accounts deferred taxed beneficiary rate upon withdrawal 529 particularly attractive due generous contribution limits deductions education expenses act increases eligibility student loan interest deductions creates new deduction higher education expenses child tax credit though tied specifically education expenses credit provide increasing help parents investing college previously 500 per qualifying child 17 credit increases 600 2001 2004 700 2005 2008 800 2009 1 000 2010 thereafter higher retirement plan contribution limits tax act allow people earned income invest retirement plans iras possibly helping retire sooner comfortably options may include traditional roth iras annual contribution limits types iras gradually rise 2 000 year 5 000 2008 limits indexed inflation 500 increments 401 k 403 b working individuals also may able invest employer retirement plan limit elective deferrals gradually rise 10 500 year 15 000 2006 include catch contribution provision people 50 years older much provisions new tax law may benefit family meet identify ones apply help make see new tax law provides meaningful tax savings number areas changes phased gradually set expire 2010 without reauthorization planning must flexible enough react year year changes planning american express financial advisors excels backed corporate team specialists taxation investments estate retirement planning help make finances let know questions look forward seeing byron make save give john wesley byron w ellis cfp tm clu chfc senior financial advisor american express financial advisors ids life insurance company 1450 lake robbins drive suite 100 woodlands tx 77380 phone 281 367 8658 ext 2227 fax 281 364 9628 e mail byronellis usa net winmail dat