Although the American Jobs Creation Bill of 2004 is designed for corporate tax concerns, it has some provisions that that will affect individual and small business taxpayers.
Ability to deduct Sales Tax:
One provision is that State sales taxes you pay will be tax deductible on your 2004 return, due next April 15. The benefit of this change is apparent for people who live in 7 states that do not have income tax, like Florida, Nevada & Texas. However, for all other states this tax bill will allow filers to choose whether they want to deduct sales taxes or state income taxes that they paid.
Tougher Rules for Car Donations:
To help reduce overvalued car donations and consequently increase the amount of taxes IRS collects, starting in 2005, the rules on deducting a car you donate to charity will be tougher. Government inspectors have discovered that wide discrepancies between the value that some auto donors claim on their tax returns and the actual worth of the cars they give.
Say Good Bye to that Luxury SUV Deduction Loophole:
The new law destroys the tax loophole, where you could deduct the full cost (up to $100,000) of a truck or SUV weighing more that 6,000 pounds. Now to get the $100,000 write-off, the vehicle you purchase must weight more than 14,000 pounds. The deduction cap on Hummers and other gigantic sport utility vehicles that weigh a mere 6,000 pounds will be capped at $25,000.
