Important Changes for 2001

The following items highlight a number of administrative and tax law changes for 2001. More information on these and other changes can be found in Publication 553, Highlights of 2000 Tax Changes.

Electronic deposits of taxes. You must use the Electronic Federal Tax Payment System (EFTPS) to make electronic deposits of all depository tax liabilities you incur after 2000 if you meet either of the following conditions.

• You had to make electronic deposits in 2000.
• You deposited more than $200,000 in federal depository taxes in 1999.

If you do not meet these conditions, electronic deposits are voluntary. See chapter 16.

Section 179 deduction. For 2001, the total cost you can elect to deduct under section 179 of the Internal Revenue Code is increased to $24,000. See chapter 8.

Maximum net earnings for self-employment tax. The maximum net self-employment earnings subject to the social security part of the self-employment tax for 2001 will be published in Publications 533 and 553. There is no maximum limit on earnings subject to the Medicare part.

Wage limits for social security and Medicare taxes. The maximum wages subject to the social security tax for 2001 will be published in Publication 51, Circular A, Agricultural Employer's Tax Guide. There is no limit on wages subject to the Medicare tax.

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