facebooktwitterRSS
- Advertisement -
- Advertisement -
 

« News Home

INFLATION CHANGES | How it will affect taxpayers



Published: Sat, January 29, 2005 @ 12:00 a.m.


Some tax changes on your 2004 taxes aren't caused by changes in the tax code but result from adjustments for inflation or rising prices. They include:
STANDARD DEDUCTION increases to $9,700 for joint filers, up from $9,500 on your 2003 taxes, and to $4,850 for single filers and married couples filing separately, up from $4,750. Also, the additional standard deduction for those age 65 or older or who are blind is $950 for married taxpayers, for a total of $1,900 a couple, and $1,200 for singles. You have the choice between taking the standard deduction or itemizing your deductions, whichever option lowers your tax bill more.
PERSONAL EXEMPTION increases to $3,100 apiece for yourself, your spouse, and each qualified dependent, up from $3,050 each on your 2003 taxes.
ITEMIZED DEDUCTIONS: The income ceiling at which certain itemized deductions begin to be phased out rises to $145,950 from $142,700. If your Adjusted Gross Income exceeds $145,950, itemizations are cut by 3 percent of the excess.
TAX BRACKETS for income taxes are adjusted automatically for inflation. Couples filing jointly paid a 10 percent rate on the first $14,000 of taxable 2003 income after exemptions and deductions and 15 percent on taxable 2003 income between $14,001 and $56,800. For 2004 taxable income, the 10 percent rate applies to the first $14,300 and the 15 percent rate to the next $14,301 to $58,100.
Single filers will see the 10 percent rate apply to the first $7,150 of taxable income, up from $7,000 the year before. Their 15 percent rate runs from $7,151 to $29,050, up from a range of $7,001 to $28,400.
Higher brackets also have inflation adjustments.
KIDDIE TAX: Children under 14 years old with investment income will see the kiddie tax on stock dividends, interest and the like kick in at higher limits in 2004: The first $800 is tax-free, up from $750 in 2003. The next $800 is taxed at the child's rate, probably 10 percent, also up from $750. Amounts over $1,600 are taxed at the parents' rate. That level is up from $1,500 in 2003.
ADOPTION TAX CREDIT: The credit can be taken on expenses up to $10,630. That's $240 more than in 2003. The credit phases out for filers with Adjusted Gross Income between $159,450 and $199,450, an increase of $3,950.
MILEAGE RATE: The business mileage rate is 37.5 cents a mile for 2004. For medical, moving, and charitable travel, the rate is 14 cents a mile. In 2005, the business rate increases to 40.5 cents a mile to reflect the recent rise in gasoline prices. The medical and moving rate also increases to 15 cents a mile in 2005, while the charitable rate remains 14 cents a mile.


Don't Miss a Story

Sign up for our newsletter to receive daily news directly in your inbox.

News
Opinion
Entertainment
Sports
Services
Classifieds
Records
Discussions
Community
Help
Forms
Neighbors

HomeTerms of UsePrivacy StatementAdvertiseStaff DirectoryHelp
© 2016 Vindy.com. All rights reserved. A service of The Vindicator.
107 Vindicator Square. Youngstown, OH 44503

Phone Main: 330.747.1471 • Interactive Advertising: 330.740.2955 • Classified Advertising: 330.746.6565
Sponsored Links: Vindy Wheels | Vindy Jobs | Vindy Homes