Old tax laws, new amounts
By Kay Bell • Bankrate.com

While there are several tax-law changes every year, there also are some old tax form standbys that filers are accustomed to seeing.

These provisions remain the same, but usually are adjusted to reflect inflation. Since inflation hasn't been much of a problem, the increases aren't that substantial this tax season. But, when it comes to taxes, every dollar counts.

Here are six old tax laws and their 2003 amounts that could affect your tax bill:

1. Standard deduction amount
Most taxpayers use the standard deduction rather than itemize. This filing season, nonitemizing single filers can deduct $4,750, while head of household filers get a $7,000 standard deduction.

The big winners in this category, however, are married couples and their tax break comes primarily thanks to legislation, not inflation. In an effort to appease husbands and wives who argued that filing joint returns cheated them of tax breaks they would have received if they'd filed two separate 1040s, the standard deduction amount for couples is now double the single filer amount. That's $9,500 on 2003 returns, $1,650 more than they were allowed last year. Qualifying widows or widowers also can use this larger amount.

The change also is a boon to married couples who opt to file separate returns. Their standard deduction now equals that of single filers, giving them an $825 increase over last year's amount.

2. Personal exemptions
You, your spouse and each person listed on your tax return as a dependent translate into exemptions that can cut your tax bill. You're all worth $3,050 apiece, $50 more than the previous tax year.

3. Social Security wage base
Every worker knows that a portion of payroll taxes goes to pay for Social Security benefits. But if you earn a lot, some of your wages escape this levy. The first $87,000 you earned last year was subject to this 6.2 percent tax (your employer matched that amount). If you earned more, then the Social Security tax wasn't collected on the overage amount. You did, however, continue to pay the 1.45 percent Medicare portion (again matched by your company) on every dollar you made last year. For 2004 planning purposes, the Social Security wage base goes up to $87,900.

4. Earned income tax credit (EITC)
Workers on the other end of the income scale also get an added inflationary break. The earned income tax credit helps cut the tax bill of taxpayers who make below a certain wage limit. This filing season, a childless person who earned less than $11,230 can apply for the credit. A worker supporting one child and who made less than $29,666 is eligible, as is a worker earning less than $33,692 and taking care of two or more youngsters. The EITC earning limits are $1,000 higher in each category if the taxpayers are married and file jointly.

5. Foreign income exclusion
International workers also get a break from U.S. taxes. On 2003 returns, these filers don't have to count as U.S. taxable income up to $80,000 that they earned while abroad as long as they paid foreign taxes on the money. To take advantage of this tax break, file Form 2555, Foreign Earned Income.

6. Car costs
Low inflation, as well as relatively stable gasoline prices, also affected the various mileage deduction rates. Did you use your car for business last year? You can write off that travel at the standard rate of 36 cents per mile. This is half a cent less than the year before. Don't forget to figure other 2003 tax-deductible travel: 14 cents a mile for charity related travel and 12 cents a mile if you used your car for medical reasons or moved to take another job.