Warning: include(/home/today/www.todaysplanet.com/htdocs/pg/includes/header.inc.php): failed to open stream: No such file or directory in /home/todayspl/public_html/pg/beta/bhcourier1/temp/MN11.htm on line 1

Warning: include(): Failed opening '/home/today/www.todaysplanet.com/htdocs/pg/includes/header.inc.php' for inclusion (include_path='./:/home/todayspl/public_html/config/pagegen:/home/today/shop.todaysplanet.com/includes') in /home/todayspl/public_html/pg/beta/bhcourier1/temp/MN11.htm on line 1

Warning: include(/home/today/www.todaysplanet.com/htdocs/pg/beta/bhcourier1/temp/header.inc.php): failed to open stream: No such file or directory in /home/todayspl/public_html/pg/beta/bhcourier1/temp/MN11.htm on line 1

Warning: include(): Failed opening '/home/today/www.todaysplanet.com/htdocs/pg/beta/bhcourier1/temp/header.inc.php' for inclusion (include_path='./:/home/todayspl/public_html/config/pagegen:/home/today/shop.todaysplanet.com/includes') in /home/todayspl/public_html/pg/beta/bhcourier1/temp/MN11.htm on line 1
BHC - MN11

Home | Staff | Advertise | Archive | Site Map | Contact
  • Editorial

  • Main News

  • Other News

  • Columnists

  • Business Profiles

  • Calendar of Events

  • Stores & Stories

  • It Happened this Week

  • Real Estate

  • Restaurants

  • Sports

  • Health & Wellness

  • Automotive

  • City Notices

  • Weekly Photos

  • Classifieds

    Advertise with BH Courier


    April 14 Tax Deadline IRS Reveals Changes

    By: Courier Staff Writer

          With the April 15 tax deadline fast approaching, taxpayers are urged to electronically file through their tax preparers or though www.irs.gov which provides a link to companies now offering the free file program.
          “Nearly 1.4 million Los Angeles area taxpayers have already taken advantage of e-filing,” says lRS LA spokesman Victor Omelczenko. “If you e-file and direct deposit into the bank, you should get your refund in two weeks or less, but if you paper file, it could take much longer.”
          If the deadline can’t be met, it is still possible to get a four-month extension by filing form 4868 by Aprll 15. This and other IRS forms and publications are available for downloading at www.irs.gov. The extension gives extra time to get a tax return to the IRS, but it does not extend the time of having to pay any tax due. Interest will still be owed on any amount not paid by the deadline, and may be subject to a late payment penalty. “But file for the extension and pay as much as you can because then you won’t be facing the stiff, separate penalty for filing late,” says Omelezenko
          The IRS also has a special toll-free telephone line to request extensions by tclephone: 888-796-1074. Use form 4868 as a worksheet to prepare for the call and have a copy of the 2003 tax return. The system will give a confirmation number that the extension request has been accepted.
          For Los Angeles County low-to-moderate income, elderly and non-English speaking taxpayers, the AARP and Volunteer Income Tax Assistance Program (VITA) provide free tax assistance at over 180 sites, but days and hours of operation vary. “Some sites serve taxpayers on a walk-in basis, while others require an appointment,” says Omelczenko. To locate one nearby, call the AARP hotline at 888-227-7669 or the Los Angeles Earned Income Tax Credit hotline at 800-601-5552.
          The earned income tax credit benefits low-to-moderate income people who earn under $35,458. “A tax credit usually means more money in your pocket and reduces the amount of tax you owe, but you have to file a federal tax federal return to claim it,” explains Ornelczenko.
          In the greater LA area, over 1.3 million taxpayers claimed credits valued at $2.4 billion on their tax year 2002 returns. But estimates show that only two out of every three taxpayers who could have claimed the credit did so. “The rules are complicated but visiting the ‘EITC Assistant web page at www.irs.gov is an easy way for both taxpayers and tax preparers to determine EITC eligibility,” says Onelczenlco.
          Like the IRS, the California State Franchise Tax Board also encourages electronic filing. Many taxpayers can file state taxes for free by going to the CalFile feature at www.ftb.ca.gov.
          Once federal taxes are filed, the status of the refund can be checkedby calling 800-829-1954 or using the “Where’s My Refund” feature at www.irs.gov. The called will need to know his filing status and the exact amount of the expected refund.
          The income limits for using the Form 1040EZ and form 1040A will increase from less than $50,000 to less than $100,000. Last year, approximately 18 million taxpayers filed a 1040EZ and another 24 million filed a 1040A. The change in the threshold will mean 1.6 million more taxpayers are eligible to file the 1040EZ or 1040A.
          The one-page form 1040EZ is for taxpayers who have no dependents, no credits other than the Earned Income Tax Credit, and no adjustments to their income The Form 1040A is for taxpayers who do not itemize deductions, claim limited tax credits, and have few adjustments to their income.
          The limit on business expenses for self-employed individuals using Schedule C-EZ also will increase to $5,000 from $2,500. This change will mean 500,000 more small business owners and self-employed taxpayers can use the simpler version of the expense form. The change will mean a savings of 5 million hours of paperwork burden for small business taxpayers.
          In addition, there are recent tax law changes that affect tax returns fled in 2005 for the 2004 tax year
          One of the biggest involves the new sales tax deduction. Taxpayers who itemize deductions will have a choice of claiming a state and local deduction for either sales or income taxes on their 2004 and 2005 returns. Optional tables are available for determining the deduction amount in Publication 600, which can be found on IRS.gov.
          Here are the major changes that affect tax years beginning in 2004:
          —Additional Child Tax Credit.Taxpayers with a credit amountmore than their tax could get a refund of the difference, up to 15% of the amount by which their 2004 taxable eamed income exceeds $10.750. Previously, the rate had been 10%.
          —Earned Income Tax Credit. In computing the Earned Income Tax Credit, a taxpayer with nontaxable combat pay has the option of counting that as earned income, or omitting it. This has no effect on the amount of combat pay that is not taxed.
          For 2004, the maximum amount of the credit is $4,300 for a taxpayer with two or more qualifying children, $2,604 for a taxpayer with one qualitying child, or $390 for a taxpayer without a qualifying child.
          —Education Incentives. The maximum Tuition and Fees Deduction is $4,000 for those with adjusted gross income (AGI) Up to $65,000 and $2,000 for those with an AGI over $65,000 but not over $80,000. These AGI amounts are doubled for married persons filing jointly.
          Distributions from Qualified Tuition Plans (QTPs) maintained by private educational institutions are excludable up to the amount of qualifed educational expenses. This tax break had been limited to Statesponsored QTPs.
          —Educator Expenses.The provision allowing educators to deduct up to $250 of expenses paid for purchases of books and classroom supplies as an adjustment to gross income, which was scheduled to expire at the end of 2003, has been extended through the end of 2005.
          —Health Savings Accounts. An “above-the-line” deduction is available for contnibutions to Health Savings Accounts made by April 15, 2005. The deduction is limited to the annual deductible on the qualifying high deductible health plan, but not more than $2,600 ($5,150, if family coverage). These limits are $500 higher if the taxpayer is age 55 or older ($500 each if both spouses are 55 or older). A person cannot contribute to an HSA starting the first month he or she is enrolled in Medicare.
          —Home Sales. Taxpayers may not exclude any gain on the sale of a principal residence if they sold the property after October 22, 2004, and had acquired it in a like-kind exchange during the five-year period ending on date of the sale.
          —Noncash Charitable Contributions. For most noncash charitable contritutions made after June 3, 2004, taxpayers must satisfy certain reporting requirements, based on the value of the deduction. For claimed contributions morc than $5,000, taxpayers must obtain a qualified appraisal and attach Form 8283 to their tax return. For claimed contributions more than $500,000 (if art, $20,000 or more), taxpayers rnust attach a copy of the appraisal
          Taxpayers should note that the American Jobs Creation Act of 2004 altered the rules for the contribution of used motor vehicles, boats and planes after December 31, 2004. For donations after that date, if the claimed value of the donated motor vehicle, boat or plane exceeds $500 and the item is sold by the charitable organization, the taxpayer is limited to the gross proceeds from the sale.
          —Retirement Plans / Individual Retirement Arrangements. The elective deferral limit for 401(k), 403(b) and most 457 plan participants rose to $13,000 ($16,000. for 403(b) participants for whom the 15-year rule applies). For SIMPLE plans, the limit rose to $9,000.
          The catch-up contribution limit for persons age 50 or older rose to $3,000 for 401(k), 403(b) and 457 plans and to $1,500 for SIMPLE plans.
          The $10,000 phaseout range for IRA deductlons for those covered by a pension plan begins at income of $45.000 ($65,000 if married filling jointly or a qualifying widow(er). It still begins at zero for married persons filing separately.
          —Sales Tax Deduction. For 2004 and 2005, taxpayers who itemize have the choice of deducting state and local income or sales taxes. An optional state sales tax table may be used in lieu of receipts for sales taxes paid. Sales taxes paid on a motor vehicle may be added to the table result, but only up to the amount paid at the general sales tax rate. Sales taxes on a boat, plane, home,or home building materials may be added if taxed at the general sales tax rate. See IRS Publication 600, Optional State Sales Tax Tables, for rnore Information.
          —Standard Deduction. The basic standard deductlon for married taxpayers filing jointly and qualifying widow(er)s has increased to $9,700 (twice that of single filers). The standard deduction for married taxpayers filing separately has increased to $4,350 (the same as that of single taxpayers).
          —Standard Mileage Rates.For 2004, the rate for operating your car (Including vans, pickups or panel trucks) increased to 37.5 cents a mile for all business miles driven. Thg standard mileage rate for computing deductable modical or moving expenses, or when giving services to a charitable organization,increased to 14 cents a mile.
          Beginning Jan. 1, 2005, the standard mileage rates for the use of a car will be 40.5 cents a mile for all business miles driven, 15 cents a mile when cornputing deductible medical or moving expenses, and 14 cents a mile when giving services to a charitable organization.

    Advertise with BH Courier

    Home | Staff | Advertise | Archive | Site Map | Contact
    For more information, please contact us.
    © 2001 Beverly Hills Courier. All Rights Reserved.

    Warning: include(/home/today/www.todaysplanet.com/htdocs/pg/includes/site.inc.php): failed to open stream: No such file or directory in /home/todayspl/public_html/pg/beta/bhcourier1/temp/MN11.htm on line 55

    Warning: include(): Failed opening '/home/today/www.todaysplanet.com/htdocs/pg/includes/site.inc.php' for inclusion (include_path='./:/home/todayspl/public_html/config/pagegen:/home/today/shop.todaysplanet.com/includes') in /home/todayspl/public_html/pg/beta/bhcourier1/temp/MN11.htm on line 55