|
|
|
|
These are just the highlights. To read more and to find out what other changes were made, visit the IRS web site at www.irs.gov. There were two major tax revisions during 2004. The Working Families Relief Act of 2004 was signed by the President on October 4, 2004 and the American Jobs Creation Act of 2004 was signed on October 22, 2004. Highlights of the Working Families Tax Relief Act: 1. Increased the Child Tax Credit to $1,000 for taxable years 2005-2010 2. Marriage Penalty Relief. The basic standard deduction for joint tax filers is twice that of single filers. 3. Extends the 10% tax bracket for 2005 - 2010. The brackets are:
4. AMT Exemption were changed for 2005 5. Establish a uniform definition of Qualifying Child. A qualifying child under the uniform definition must meet the following three tests: Residency Test, Relationship Test and Age Test 6. Expenses of School Teachers has been extended for 2004 and 2006 but these are now reported differently in 2006 due to the late extension. 7. Archer Medical Savings Accounts. Taxpayers may establish a new Archer Medical Savings Account (MSA) through Dec 31, 2005. Highlights of the American Jobs Creation Act: 1. The election to deduct state and local general sales taxes in lieu of state and local income taxes. For tax years after 2003 and before 2006. This will allow the taxpayer to deduct either state and local income taxes or state and local general sales taxes as an itemized deduction on Schedule B of the Federal Tax return. The deduction is subject to phase out limitations. 2. Above the line deduction for attorney's fees and court costs for the following: A claim of unlawful discrimination as defined in the tax code Claims against the federal government under as described under the tax code A private cause of action under Medicare Secondary Payer Statute 3. Certain expenses of rural mail carriers may now be deductible on Schedule B, subject to 2% limitation under misc deductions. 4. Vehicle Donations. New reporting requirements are in place for all donated vehicles with a value of more than $500. A written acknowledgement must now be provided by the donee to the donor within 30 days of the contribution.
|
|
Send mail to
webmaster@centrevilletaxservice.com with
questions or comments about this web site.
|
