2004 Instructions for Form 1040 (ALL) - Supreme Law Firm

Before You Fill
In Form 1040
See How To Avoid Common Mistakes on page 57.
If you were serving in, or in support of, the U.S. Armed Forces in a designated combat
zone, qualified hazardous duty area, or contingency operation (for example, you were in the
Afghanistan, Bosnia, Kosovo, or Persian Gulf area), see Pub. 3.
For details on these and other your tax. The Tax Computation Worksheet your qualified higher education expenses.
TIP changes for 2004 and 2005, see is on page 72. The Tax Rate Schedules are See Pub. 970.
Pub. 553.
shown on page 76 so you can see the tax
rate that applies to all levels of taxable inamount
you can defer under all plans is
Elective salary deferrals. The maximum
come, but they should not be used to figure
your tax.
generally limited to $13,000 ($16,000 for
section 403(b) plans if you qualify for the
What’s New for 2004 IRA deduction allowed to more people 15-year rule). The catch-up contribution
covered by retirement plans. You may be
Health savings account (HSA) deduction. limit increased to $3,000 ($1,500 for
able to take an IRA deduction if you were
You may be able to take a deduction if SIMPLE plans). See the instructions for
covered by a retirement plan and your modcontributions
(other than employer contri-
line 7 on page 19.
ified AGI is less than $55,000 ($75,000 if
butions) were made to your HSA for 2004. married filing jointly or qualifying Excise tax on insider stock compensation
See Form 8889 for details. widow(er)). See the instructions for line 25 from an expatriated corporation. You
Tuition and fees deduction expanded. that begin on page 26.
may owe a 15% excise tax on the value of
You may be able to deduct up to $4,000 if
Certain business expenses of reservists, nonstatutory stock options and certain
your adjusted gross income (AGI) is not
performing artists, and fee-basis other stock-based compensation held by
more than $65,000 ($130,000 if married
government officials. These expenses are you or a member of your family from an
filing jointly), or deduct up to $2,000 if
now reported on line 24. See the instrucyour
AGI is higher than that limit but not
expatriated corporation or its expanded af-
tions for line 24 on page 26.
filiated group in which you were an officer,
more than $80,000 ($160,000 if married
director, or more-than-10% owner. See the
filing jointly). See the instructions for line Earned income credit (EIC). You may be instructions for line 62 on page 40.
27 on page 29.
able to take the EIC if:
• A child lived with you and you earned Mailing your return. You may be mailing
Sales tax deduction. You can elect to deyour
return to a different address this year
less than $34,458 ($35,458 if married filing
duct state and local general sales taxes inbecause
the IRS has changed the filing lojointly),
or
stead of state and local income taxes as an
• A child did not live with you and you
cation for several areas. If you received an
itemized deduction on Schedule A. Generenvelope
with your tax package, please use
earned less than $11,490 ($12,490 if marally,
you can use either your actual exit.
Otherwise, see Where Do You File? on
ried filing jointly).
penses or the Optional State Sales Tax
the back cover.
Tables to figure your state and local general If you were a member of the U.S.
sales tax deduction. See the Instructions for Armed Forces who served in a combat
Schedule A for details.
zone, you may be able to include your non-
Income averaging for farmers and fisherfiguring
taxable combat pay in earned income when What’s New for 2005
the EIC.
IRA deduction expanded. You, and your
men. Fishermen can elect to use income
averaging on Schedule J to reduce their tax.
See the instructions for lines 65a and spouse if filing jointly, may be able to de-
Also, the benefit of income averaging is
65b that begin on page 41.
duct up to $4,000 ($4,500 if age 50 or older
extended to farmers and fishermen who
at the end of 2005). If you were covered by
owe the alternative minimum tax. See the Additional child tax credit expanded. The a retirement plan, you may be able to take
Instructions for Schedule J for details. credit limit based on earned income is in- an IRA deduction if your 2005 modified
creased to 15% of your earned income that
Unlawful discrimination claims. You may
AGI is less than $60,000 ($80,000 if marexceeds
$10,750. If you were a member of
be able to take a deduction on line 35 for
ried filing jointly or qualifying widow(er)).
the U.S. Armed Forces who served in a
attorney fees and court costs paid after Occombat
zone, your nontaxable combat pay
tober 22, 2004, for actions settled or decounts
as earned income when figuring this
EIC phaseout amount increased for joint
cided after that date involving a claim of
filers. The maximum amount of earned
credit limit. See Form 8812 for details.
unlawful discrimination, a claim against
income that joint filers can have and still
the United States Government, or a claim Standard mileage rates. The 2004 rate for take the EIC will be $2,000 more than that
made under section 1862(b)(3)(A) of the business use of your vehicle is 37 1 for other filers.
⁄2 cents a
Social Security Act, but only up to the mile. The 2004 rate for use of your vehicle
Elective salary deferrals. The maximum
amount included in gross income in 2004 to get medical care or to move is 14 cents a
amount you can defer under all plans is
from such claim. See Pub. 525 for details. mile.
generally limited to $14,000 ($17,000 for
Tax Computation Worksheet. If your tax- Qualified tuition program (QTP) section 403(b) plans if you qualify for the
able income is $100,000 or more, you will distributions. You may be able to exclude 15-year rule). The catch-up contribution
now use the Tax Computation Worksheet from income distributions from a private limit is increased to $4,000 ($2,000 for
instead of the Tax Rate Schedules to figure QTP if the distributions are not more than SIMPLE plans).
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