TABLE OF CONTENTS

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HIGHLIGHTS OF THE AMERICAN JOBS CREATION ACT OF 2004" IMPACTING INDIVIDUALS......................................... 1

NEW DEDUCTION FOR STATE AND LOCAL SALES TAX........................................................................................... 1

EXCLUDING GAIN ON SALE OF PRINCIPAL RESIDENCE.......................................................................................... 1

DONATIONS OF MOTOR VEHICLES, BOATS, AND AIRCRAFT................................................................................... 1

179 DEDUCTION FOR SUVs REDUCED.................................................................................................................... 1

NEW RESTRICTIONS ON NON-QUALIFIED DEFERRED COMPENSATION PLANS...................................................... 2

ATTORNEY FEES.................................................................................................................................................... 2

SELECTED PROVISIONS OF THE WORKING FAMILIES TAX RELIEF ACT OF 2004"........................................................ 3

EXEMPT COMBAT PAY IS EARNED INCOME FOR EARNED INCOME CREDIT CALCULATION.................................... 3

INCREASED CHILD TAX CREDIT............................................................................................................................... 3

EDUCATORS CLASSROOM EXPENSE DEDUCTION.................................................................................................. 3

UNIFORM DEFINITION OF CHILD FOR TAX PURPOSES............................................................................................ 3

SELECTED PROVISIONS OF THE MILITARY FAMILY TAX RELIEF ACT OF 2003"............................................................ 3

INCREASED DEATH BENEFITS................................................................................................................................ 4

HOME-SALE RELIEF................................................................................................................................................ 4

TAX RELIEF FOR HOMEOWNERS ASSISTANCE...................................................................................................... 4

NATIONAL GUARD AND RESERVE TRAVEL............................................................................................................. 4

TAX-FREE CHILD CARE BENEFITS........................................................................................................................... 4

SERVICE ACADEMY APPOINTMENTS..................................................................................................................... 4

THE MEDICARE PRESCRIPTION DRUG MODERNIZATION ACT OF 2003.......................................................................... 4

PLANNING WITH CAPITAL GAINS AND LOSSES............................................................................................................ 5

WATCH OUT FOR INCENTIVE STOCK OPTIONS AND AMT........................................................................................ 5

YEAR-END CONSIDERATIONS FOR CAPITAL ASSETS............................................................................................. 5

STOCK TRADERS MAY SAVE TAXES BY ELECTING MARK-TO-MARKET.................................................................. 5

POSTPONING TAXABLE INCOME................................................................................................................................... 6

SELF-EMPLOYED BUSINESS INCOME.................................................................................................................... 6

INSTALLMENT SALES.............................................................................................................................................. 6

REAL ESTATE SWAPS............................................................................................................................................ 6

DEFERRED COMPENSATION.................................................................................................................................. 6

REQUIRED DISTRIBUTIONS FROM RETIREMENT PLANS AFTER 70 OR DEATH....................................................... 7

IRS GRANTS RELIEF FOR LATE IRA ROLLOVERS.................................................................................................... 7

TAKING ADVANTAGE OF DEDUCTIONS.......................................................................................................................... 7

ACCELERATING DEDUCTIONS INTO 2004................................................................................................................ 7

BUNCHING ITEMIZED DEDUCTIONS......................................................................................................................... 8

BUNCHING MEDICAL EXPENSES............................................................................................................................. 8

DEDUCTION FOR SELF-EMPLOYED HEALTH INSURANCE COSTS........................................................................... 8

MAXIMIZING EMPLOYEE BUSINESS EXPENSES...................................................................................................... 8

CHARITABLE CONTRIBUTIONS................................................................................................................................ 9

MAXIMIZING HOME MORTGAGE INTEREST DEDUCTION.......................................................................................... 9

TAX RELIEF FOR HURRICANE LOSSES................................................................................................................... 9

TAX-WISE PAYMENT OF STATE AND LOCAL TAXES.............................................................................................. 10

CLUB DUES........................................................................................................................................................... 10

COMPANION TRAVEL EXPENSES.......................................................................................................................... 10

TAX-WISE PLANNING FOR EDUCATION COSTS........................................................................................................... 10

COVERDELL EDUCATION SAVINGS ACCOUNTS.................................................................................................... 10

SECTION 529 PLANS............................................................................................................................................. 11

EDUCATION EXPENSE DEDUCTION....................................................................................................................... 11

IRS RELEASES FINAL REGULATIONS FOR STUDENT LOAN INTEREST.................................................................. 11

HOPE EDUCATION TAX CREDIT............................................................................................................................. 12

THE LIFETIME LEARNING CREDIT.......................................................................................................................... 12

TAX PLANNING FOR YOUR HOME................................................................................................................................ 12

IRS RELEASES FINAL HOME SALE EXCLUSION REGULATIONS............................................................................. 12

THE HOME OFFICE DEDUCTION............................................................................................................................ 13

RENTING YOUR HOUSE TO A RELATIVE CAN BE TRICKY...................................................................................... 13

PLANNING WITH RETIREMENT PLANS......................................................................................................................... 13

CONSIDER CONTRIBUTING THE MAXIMUM TOWARD YOUR RETIREMENT.............................................................. 13

THE ROTH IRA - A VALUABLE RETIREMENT SAVINGS OPTION.............................................................................. 14

SETTING UP A ROTH IRA FOR A MINOR................................................................................................................. 14

OTHER ITEMS TO CONSIDER.................................. 14

$250 ABOVE-THE-LINE DEDUCTION FOR TEACHERS............................................................................................. 14

ADOPTION TAX CREDIT.......................................................................................................................................... 14

CLEAN-FUEL VEHICLES DEDUCTION..................................................................................................................... 15

MOVING EXPENSES.............................................................................................................................................. 15

SOCIAL SECURITY NUMBERS FOR DEPENDENTS................................................................................................. 15

PENALTY FOR UNDER-WITHHOLDING OR UNDER-ESTIMATING............................................................................. 15

TAX COURT FINDS TAXABLE PORTION OF NON-TAXABLE PHYSICAL PERSONAL INJURY...................................... 15

IRS WARNS AGAINST FRIVOLOUS ARGUMENTS................................................................................................... 16

FINAL COMMENTS........................................................................................................................................................ 16