December 8, 2004

New Tax Laws Have Taken Effect
Working Families Tax Relief Act of 2004

Here are some of the highlights:

The higher exemption from the Alternative Minimum Tax (AMT), which was scheduled to revert back to lower levels, will now continue to apply through 2005.

The full $2,000 deduction for the purchase of clean-fuel vehicles was reinstated. The special deduction applies to clean-fuel vehicles purchased at any time in 2004 or 2005. (By the way, the IRS just last week announced certification of the 2005 Toyota Prius as qualifying for this deduction).

The expanded 10% tax bracket, which was due to expire at the end of this year will now continue through year 2010.

The accelerated Marriage Penalty Relief will be extended through 2010. That means the 15% tax bracket and the Standard Deduction for Married couples will be exactly Double those of Single taxpayers, at least for the next 6 years.

The 1,000 per child tax credit (which was scheduled to drop back to $700 in 2005) will remain at $1,000/child through the year 2010.

All of those changes are positive. The first two in particular could apply to some small and home-based business owners, although none of the changes are directly related to small business.
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