Every year, you have to file tax returns and every year there are changes to the tax code. Here are some key changes for 2005 to keep in mind when you prepare returns.
Tax Changes You Should Know for 2005 Returns
2005 was a fairly quite year when it came to changes to the tax code. Most changes were in the form of tweaks, instead of major overhauls. This break seems to have given the IRS a change to clean up some of its procedures as it has started simplifying forms. Nonetheless, here are changes to keep in mind when preparing your tax returns.
1. Donations of automobiles to charities are being treated differently from 2005 forward. If you donated a car to charity in 2005, you may be in for a minor shock. Instead of claiming fair market value, the deduction for the donation is now limited to the actual gross payment received by the charity when auctioning off the automobile. The charity you donated to should have sent you correspondence indicating the amount in question. If they did not, contact them to get one so you know what you can deduct.
2. The business mileage allowance is a two-tier system for the 2005 tax year. For business miles incurred...
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