This publication highlights tax law changes that take effect in 2000 and 2001. The chapters are divided into separate sections for
each year.
During 2000, many changes to the tax law were considered by
Congress. Several of our publications and instructions to tax forms
contained Cautions about possible changes in the law. The
changes to the law that Congress made are explained in this
publication.
The changes discussed in this publication resulted from the
Community Renewal Tax Relief Act of 2000, the FSC Repeal and
Extraterritorial Income Exclusion Act of 2000, the Installment Tax
Correction Act of 2000, and other legislative and administrative
decisions. These changes include the following items.
- New method for extensions of time to file.
- Electronic payment options.
- Paid preparer authorization to handle certain tax return
processing issues.
- Reduction of capital gains tax rate.
- Extension of the first-time homebuyer credit in the District
of Columbia.
- Allowance of cash method of accounting for qualifying
taxpayers.
- Allowance of the installment method of accounting for
qualifying accrual method taxpayers.
- Repeal of the foreign sales corporation rules and new rules
for excluding qualifying foreign trade income.
See the later discussion of each topic for more information.
Adjusting your withholding or estimated tax payments for
2001.
If your tax for 2001 will be more or less than your 2000 tax, you
may need to adjust your withholding or estimated tax payments
accordingly. If your tax is decreasing, you can get the benefit of
lower taxes throughout the year. If you will owe more tax, you can
avoid a penalty when you file your tax return.
See the following table for forms and publications that will help
you adjust your withholding or estimated tax payments. See chapter 8
for information on ordering forms and publications.
| To adjust your.... |
Get Form... |
And Publication... |
| Withholding |
W-4, Employee's Withholding Allowance Certificate |
919, How Do I Adjust My Tax Withholding? |
| Estimated tax payments |
1040-ES, Estimated Tax for Individuals |
505, Tax Withholding and Estimated Tax |
Note.
Form 1040-ES, Estimated Tax for Individuals, for
2001 contained a Caution about the possibility that
legislation enacted after December 8, 2000, could affect the
computation of your 2001 estimated tax. For more information about
this legislation and other changes that may impact your estimated tax,
see 2001 Changes in chapter 1.
Photographs of missing children.
The Internal Revenue Service is a proud partner with the National
Center for Missing and Exploited Children. Photographs of missing
children selected by the Center may appear in this publication on
pages that would otherwise be blank. You can help bring these children
home by looking at the photographs and calling
1-800-THE-LOST
(1-800-843-5678) if you recognize a child.
Comments and suggestions.
We welcome your comments about this publication and your
suggestions for future editions.
You can e-mail us while visiting our web site at
www.irs.gov/help/email2.html.
You can write to us at the following address:
Internal Revenue Service
Technical Publications Branch
W:CAR:MP:FP:P
1111 Constitution Ave. NW
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be
helpful if you would include your daytime phone number, including the
area code, in your correspondence.
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