Among recent tax news that may affect you are the following
items:
Among recent tax news that may affect you are the following items:
Depreciation limits for luxury vehicles purchased for business use have been announced by the IRS. For business cars first placed in service in 2004, the depreciation limit for the first year is $2,960. If the vehicle qualifies for bonus depreciation, the limit is $10,610. The depreciation limit for year two is $4,800, and for year three, it’s $2,850. For all years thereafter, the limit is $1,675. The IRS also published the limits for light trucks, vans, sport utility vehicles and electric automobiles.
Last year’s Military Family Tax Relief Act included a provision that would help military personnel meet the ownership and use requirements to exclude gain on a home sale from tax. The relief is retroactive to sales occurring after May 6, 1997. Though tax returns for the years 1997 through 2000 normally could no longer be amended due to the statute of limitations, the IRS will allow amended returns to be filed for this home sale relief up to November 10, 2004. Filers are to write “Military Family Tax Relief” in red at the top of the amended return so that the IRS can expedite processing.
Some financial institutions issued revised 1099 forms for 2003 after the April 15, 2004, filing deadline for 2003 income tax returns. Taxpayers are likely to get notices from the IRS if these revisions report amounts that don’t agree with what the taxpayers reported on their tax returns. Amending your return is likely to be necessary, especially if the reissued Form 1099 resulted in a higher tax bill for you.
The Treasury Department will no longer issue Series HH savings bonds after August 31, 2004. That means investors will no longer be able to exchange Series E and EE savings bonds for HH bonds, a strategy that permitted deferral of tax on the interest earnings until the HH bonds matured.
For details or assistance, contact our office.
Kris Nolan is a partner with the accounting and business consulting firm of Bianchi, Lorincz & Company located in downtown Hollister.
