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 Sales and Other Dispositions of Assets Publication Casualties, Disasters, and Thefts Publication 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???