1. 2005 Tax Presentation Quiet Year in Tax Land (and Tax Software Land)

2. CHANGES APPLYING TO 2004 TAX YEAR  Standard Deduction $9700 for Joint $4850 for Single $7100 Head of Household  Exemption Rises to $3100 Phase outs from $107,025 to $214,050  IRA’s to $13,000 ($16K if 50+)  Mileage-Business 37.5 cents/mile (14 for Medical)

3. CHANGES APPLYING TO 2004 TAX YEAR(CONT.)  Sales or State Income Tax Deduction  Hummer SUV Rule (1 st year limit of $25,000)  Child Care Changes (Calculates automatically)  Clean Fuel Vehicles Credit Retained at $2k for 2005  Medical Savings Accounts (In conjunction with high deductible Major Medical Policies.)  Lots of special rules for military.  2-2004 Laws may impact forms and provisions.

4. PROBLEMS/OPPORTUNITIES  Contributions – Take the time to price with Value Guide  Watch for the AMT Level at which it kicks in hasn’t changed since enacted. Very complicated (may need to do draft returns before end of year.) Triggers – Large Capital Gains – Large deductible estimated tax payments – Large amounts of dividends.  MN AMT can be accessed on a negative net income.

5. INTERNET SITES http://www.irs.govhttp://www.irs.gov (Official Federal Government site with forms and instruction booklets)  Each State has an official site-Minnesota’s is http://www.taxes.state.mn.us http://www.taxes.state.mn.us  http://www.hrblock.com http://www.hrblock.com  http://turbotax.com http://turbotax.com  http://taxes.about.com (fairly general overview) http://taxes.about.com  http://www.satruck.com/ValueGuide.asp (Salvation Army Current Contribution Guide) http://www.satruck.com/ValueGuide.asp

6. GENERAL ADVICE During tax time, it is hard to reach knowledgeable people by phone. Try the official web sites first since most questions can be answered from the on-line material.

7. Auto Donations  New Rules in 2005  Deduction is Limited if Charity Sells Vehicle To Value Realized by Charity  Charity Must Notify Giver of Intended Use Within 30 Days  CREATES MANY NEW ISSUES

8. TAX SOFTWARE  Consumer software is fairly standard.  Two major ones Tax Cut TurboTax  Current User – Easiest to Stay With Last Year’s  Bundles Offer Considerable Savings – (Based on Rebates)