Pay attention to the newest tax law to cut your 2001 income taxes

On March 9, President Bush signed the Job Creation and Worker Assistance Act of 2002.  The new law contains important provisions that affect both individuals and businesses.  Many of the tax benefits are retroactive to last year.  Here are two tax breaks that may affect your 2001 income tax return.

Take "bonus" depreciation.  Businesses can write off up to 30% of the cost of eligible equipment purchases and property improvements made after September 10, 2001.  This bonus depreciation is in addition to the regular first-year depreciation deduction.

Get immediate relief for tax losses.  If you had a tax loss last year, you have two choices when it comes to taxes.  You can carry the loss back to offset prior-year income for an immediate tax refund, or you can wait until a future year to use the loss.  Before this law change, you could generally carry back your losses for two years.  The new law temporarily extends the net operating loss carryback period to five years.

If you've already filed your 2001 income tax return, you'll need to amend your return to take advantage of any new tax breaks that affect you.