Public Law 108-27, The Jobs and Growth Tax Relief Reconciliation Act of 2003, was signed by President Bush on May 28, 2003.  Described below are the major changes made by the new law that affect tax years beginning in 2003.  Be sure to take these changes into account when figuring any future estimated tax payments due for 2003.

All Businesses, Including Self-Employed

• The special first-year depreciation allowance has been increased from 30% to 50% for qualified property acquired after May 5, 2003 (except for property acquired under a binding written contract in effect before May 6, 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.  The 2002 Instructions for Form 4562 will be reissued in June 2003 for use by fiscal year 2002-2003 filers to reflect the increase in the special allowance.
  
• The limit on the section 179 expense deduction is increased to $100,000 for qualified property ($135,000 for qualified zone property, qualified renewal property, or qualified New York Liberty Zone property).  This limit is reduced by the amount by which the cost of section 179 property placed in service during the year exceeds $400,000.  Also, the definition of section 179 property has been expanded to include off-the-shelf computer software.

Corporations

• The installment due date for 25% of any corporate estimated tax payment otherwise due in September 2003 has been changed to October 1, 2003.  The due date for the remaining 75% of the September 2003 estimated tax payment has not changed.