We read and hear about tax changes, some looming, some happening all year long, and there were major changes at the end of this October found in hundreds of pages of a new tax statute. But it’s not always clear: “Does this affect me or not?” As autumn rolls into winter, the drumbeat of worry becomes more insistent – in fact, sometimes a headache.

Some of what’s new in 2004 for individuals:

• Option to deduct state/local sales tax or income tax (this is great for residents of states without income taxes)
• Automobile donations – 2004 is last year to donate used cars before tougher rules kick in for you to prove the value of your claimed deduction
• Computer donations – extension of the enhanced deduction for contributions of qualified computers (and don’t ignore that “qualified” component)
• Civil rights tax relief – Attorneys’ fees and court costs for unlawful discrimination claims can be deducted above-the-line, that is, even if you do not itemize other deductions
• Improvements in child care credit – multiple considerations here: More people will now qualify for the credit based on the definition of “child”; The refundable portion of credit is raised from 10% to 15%;
  The continued maximum credit of $1,000 is continued, not phased down to $750.

For small businesses, a lot is changing:

SUV “loophole” closed – from Oct. 22, 2004, $25,000 cap on first year write-off of SUV cost (6,000-14,000 pounds), but only until year-end can you get the bonus first year depreciation on top of the $25,000 write-off

• New $5,000 deductions for start-up and organizational expenses of new businesses
• Increased limit on first-year expensing of property placed in service before 2007

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