working families tax relief act of 2004. "the taxpayer: that's someone who works for the...
TRANSCRIPT
Working Families Tax Relief Act of 2004
"The taxpayer: That's someone who works for the federal government, but doesn't have to take the civil
service examination."
- Ronald Reagan
Educators’ Deduction
• Restored for 2004 and 2005
• Up to $250; deducted when computing
AGI
Child Tax Credit
If credit is more than tax:
• Percent increased from 10% to 15%
• Refund of difference up to 15% of amount that 2004 taxable earned income exceeds $10,750
Combat Pay
• Included when computing Child Tax Credit
• Option of counting or ignoring when computing Earned Income Tax Credit
• Still excluded from taxable income
Sales Tax Deduction
• Must itemize• Choice of claiming a state and local tax
deduction for either sales or income taxes on 2004 and 2005 returns
• Sales taxes paid on motor vehicles and boat may be added to table amount as well as other items specified in Publication 600
Family Tax Relief Provisions
Extended through 2010
• $1000 child tax credit• Expanded 10% tax bracket• Marriage penalty relief
Non-Business Casualty Losses
AKA - The legacy of hurricanes Charley, Frances, Ivan, Jeanne,
etc.
Resources
• Form 1040 Schedule A (from Form 4684)• Publication 17 - Chap. 27 • Publication 544 - Sales and Other
Dispositions of Assets• Publication 547 - Casualties, Disasters, and
Thefts• Publication 584 - Casualty Disaster, and
Theft Loss Workbook (Personal-Use Property)
MUST Have Proof of Loss …
Records showing:
• Type of Casualty
• Loss was direct result of casualty
• Ownership of property
• No reasonable expectation of $ recovery
AMOUNT of Loss
• Adjusted Basis
• Decrease in Fair Market Value
• Subtract insurance or other reimbursement
Deduction Limitations:
• Claimed on Form 1040 Schedule A Line 19
• Reduce each TOTAL casualty by $100
• Reduce result by 10% of AGI
(Form 1040 Line 34)
Questions???