Financial Focus   Provided by Michael J Haynes Edward Jones Investments New Tax Laws Expand Your Investment Opportunities        You've probably seen a lot of headlines on the Tax Relief Act of 2003. This legislation, recently signed into law by President Bush, will affect virtually everyone in the country. As an individual investor, you've got reasons to cheer the new tax laws. Many people will find that their taxes will decrease 5 percent or more under the new tax laws.         Let's review some of the tax act's key areas and see what actions they might suggest:        Lower dividend taxes - If you've invested in dividend-paying stocks, your dividends were taxed at your individual tax rate (e.g., 27 percent, 30 percent, 35 percent or 38.6 percent). But under the new laws, the tax rate on dividends will be cut to 15 percent. And if you're in the 10 percent to 15 percent bracket, the dividend tax rate drops to 5 percent. These new, lower rates are effective retroactively to the beginning of 2003 through 2008. In 2009, dividend taxes are scheduled to revert to the old, higher rates.        Should you be interested in stocks that have a history of paying dividends, there are certain considerations to take into account. First, it's nice to get the dividend checks. (Keep in mind, though, that stocks do not offer a fixed rate of return and may not distribute dividends. Stocks are subject to market risks, including the potential loss of principal invested.) Also, when a company pays dividends, it can be a sign that the business is well-run and concerned about the needs of its shareholders. Conditions can change at any time, but stocks with a track record of paying dividends tend to be more steady performers relative to non-dividend-paying stocks that have a limited track record.        Another advantage to dividend-paying stocks: Investors can consider reinvesting unneeded dividend income into additional shares of stocks.        Lower capital gains taxes - The long-term capital gain rate has been reduced to 15 percent from 20 percent for many taxpayers. Taxpayers in the 10 percent and 15 percent ordinary income tax rate brackets will see a decrease in capital gains taxes from 10 percent to 5 percent. All of these reductions are effective for sales of securities after May 5, 2003. As is the case with dividend taxes, the new rate will remain in place through 2008.        If you've held some stocks for many years, and they've appreciated significantly, then the cut in capital gain taxes may benefit you greatly. Previously, you may have avoided selling these stocks - even if your diversification needs have changed - because you didn't want to face a big tax hit.        Now, however, with the new, lower capital gains rate, you'll find it much more affordable to sell these stocks and make the changes you need to help you properly balance your portfolio. But talk to your tax professional as tax considerations should not be the driving factor for making investment decisions.        Other beneficial changes in the tax laws include:        Lower tax rates - Earlier tax law changes lowered tax brackets for 2006, but the new legislation has sped up the timetable, so that the new rates are retroactively effective on Jan. 1, 2003. The 10 percent and 15 percent rates remain unchanged, but the 27 percent rate drops to 25 percent; the 30 percent rate drops to 28 percent; the 35 percent rate falls to 33 percent; and the 38.6 percent rate drops to 35 percent.        Reduction of Marriage Penalty - Married couples who claim the standard deduction should benefit from this accelerated reduction of the marriage penalty tax. The standard deduction for married couples is increased to double the amount of the standard deduction for single taxpayers in 2003 and 2004.        Increase in Child Tax Credit - The amount of the child tax credit is increased to $1,000 (from $600) in 2003 and 2004. Beginning this summer, the increased amount of the child tax credit will be paid in advance based on information in taxpayers' 2002 tax returns.        Small business owners also will benefit as a result of the tax act.        Increase in Small Business Expensing for New Investment - This tax act quadruples the maximum amount of investment in equipment that small businesses can expense from $25,000 to $100,000. This will encourage small business owners to purchase the technology, machinery and other equipment they need to expand.        Increase in First-year Bonus Depreciation - This deduction increases from 30 percent to 50 percent for qualified investments which are placed in service after May 5, 2003 and before January 1, 2005.        You may want to invest your tax savings by setting up a bank authorization that moves money automatically, at a set interval, from your bank account into the investment of your choice. Since systematic investing does not assure a profit nor does it protect you against losses in declining markets, it's best to consult with your investment representative and tax advisor to see how you can adjust your investment strategies in response to the new tax laws. But take action soon - this legislation has given you some great possibilities, and you'll want to take advantage of them.