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Guidance for Special Types of Businesses Important Changes for 1999 Business use of your home. Beginning in 1999, you may be ableto deduct expenses for your home office even if it is not where you perform your mostimportant business activities or spend most of your business time. Child tax credit. You may be able to claim a tax credit foreach of your qualifying children under the age of 17. For 1999, this credit can be as muchas $500 for each qualifying child. See the instructions for Form 1040. Depreciation limits on business cars. The total section 179deduction and depreciation you can take on a car you use in your business and first placein service in 1999 is $3,060. Special rules apply to certain clean-fuel vehicles. Earned income credit. The maximum earned income credit hasbeen increased to $3,816 for 1999. To claim the credit, you must have earned income(including net earnings from self-employment) and modified adjusted gross income of lessthan $30,580 and meet certain other requirements. For more information, including whatcounts as earned in-come, see Publication 596,Earned Income Credit. Photographs of missing children. The Internal Revenue Serviceis a proud partner with the National Center for Missing and Exploited Children.Photographs of missing children selected by the Center may appear in this publication onpages that would otherwise be blank. You can help bring these children home by looking atthe photographs and calling 1-800-THE-LOST (1-800- 843-5678) if you recognize achild. Section 179 deduction. For 1999, the total cost you can electto deduct under section 179 of the Internal Revenue Code is increased to $19,000. Self-employed health insurance deduction. The part of yourself-employed health insurance premiums that you can deduct as an adjustment to incomeincreased to 60% for 1999. Standard mileage rate. The standard mileage rate for the costof operating your car, van, pickup, or panel truck in 1999 is 32 cents a mile for allbusiness miles driven before April 1. The rate is 31 cents a mile for business milesdriven after March 31. Tax rates and maximum net earnings for self-employment tax. Themaximum net self-employment earnings subject to the social security part (12.4%) of theself-employment tax increased to $72,600 for 1999. There is no maximum limit on earningssubject to the Medicare part (2.9%). Important Changes for 2000 Electronic deposits of taxes. The threshold that determineswhether you must deposit taxes electronically has been increased to $200,000. You must usethe Electronic Federal Tax Payment System (EFTPS)to make electronic deposits of all depository tax liabilities that occur after 1999 if youdeposited more than $200,000 in federal depository taxes in 1998. If you do not meet the$200,000 threshold, electronic deposits are voluntary, even if you were required tode-posit electronically under a previous thresh-old. The waiver of the penalty for failureto deposit taxes electronically that was scheduled to expire on July 1, 1999, has beenex-tended to deposit obligations incurred before January 1, 2000, except for taxpayers whodeposited more than $200,000 in taxes in 1998. Section 179 deduction. For 2000, the total cost you can electto deduct under section 179 of the Internal Revenue Code is in-creased to $20,000. Tax rates and maximum net earnings for self-employment tax. Themaximum net self-employment earnings subject to the social security part of the self-employment tax for 2000 will be published in Publications533, Self Employment Tax and 553, Highlights of 1999 Tax Changes. There isno maximum limit on earnings subject to the Medicare part. Wage limits for social security and Medicare taxes. Themaximum wages subject to the social security tax for 2000 will be published in Publication 51, Circular A, AgriculturalEmployer's Tax Guide. There is no wage base limit for wages subject to theMedicare tax.
Publication 225 Farmer s Tax Guide |
