Ernst and Young Tax Guide 1999

by Ernst & Young; Bernstein, Peter W.

• ISBN13: 9780471296478
• ISBN10: 0471296473
• Edition: Yearly Ed.
• Format: Paperback
• Copyright: 1999-01-01
• Publisher: John Wiley & Sons

Summary

The most current, authoritative, and bestselling tax guide on the market. Each year, hundreds of thousands of people turn to The Ernst & Young Tax Guide for the most up-to-date and comprehensive coverage of the tax system. The new tax guide for 1999 is the only guide which includes the official IRS tax guide, Publication 17, "Your Federal Income Tax," along with Ernst & Young2s comprehensive commentary and tax trimming tips. There is also a special chapter on mutual funds that covers when to make new investments, and how to treat distributions, transfers, and redemptions. Covers many tax changes that first affect tax payers this year. Includes more final useable tax return forms than any other tax guide, in the book and on the Internet. Features new information on the gift tax. Over 450 TaxSavers, TaxAlerts, TaxOrganizers, and TaxPlanners. Ernst & Young LLP is one of the nation2s leading professional services firms. Its tax and personal finance counseling practice specializes in tailoring financial strategies to people at all income levels.

Table of Contents

1999 Tax Calendar	ii	(8)
Special Tables of Contents	x	(4)
How to Use This Guide	xiv	(1)
The Ernst & Young Tax Guide Editorial Board 1999	xv	(1)
Changes in the Tax Law You Should Know About	xvi	(4)
Important 1998 Tax Reminders from the IRS	xx	(2)
How to Avoid 25 Common Errors	xxii	(1)
50 of the Most Easily Overlooked Deductions	xxiii	(1)
Individual Tax Organizer	xxiv	(8)
Income and Expense Records You Should Keep in Addition to Your Income Tax Return	xxxii
PART I THE INCOME TAX RETURN	1	(76)
Where Do You File	2	(1)
CHAPTER 1. Filing Information	3	(22)
Tables: 1998 Filing Requirements for Most Taxpayers	5	(1)
1998 Filing Requirements for Dependents	6	(1)
Other Situations When You Must File a 1998 Return	7	(3)
Benefits of IRS e-file	10	(2)
When to File Your 1998 Return	12	(2)
6 Steps for Preparing Your Return	14	(11)
CHAPTER 2. Filing Status	25	(8)
Table: Qualifying Person	30	(1)
WORKSHEET: Cost of Maintaining a Household	31	(2)
CHAPTER 3. Personal Exemptions and Dependents	33	(15)
Figure: Can You Claim an Exemption for a Dependent?	36	(4)
Table: Worksheet for Determining Support	40	(4)
Figure: Support Test for Children of Divorced or Separated Parents	44	(3)
WORKSHEET: Deduction for Exemptions	47	(1)
CHAPTER 4. Decedents	48	(11)
SAMPLE FORM: 1998 Form 1040	52	(7)
CHAPTER 5. Tax Withholding and Estimated Tax	59	(18)
Do You Have to Pay Estimated Tax?	68	(9)
PART II INCOME	77	(216)
Chart: Income	78	(1)
CHAPTER 6. Wages, Salaries, and Other Earnings	79	(12)
CHAPTER 7. Tip Income	91	(6)
CHAPTER 8. Interest Income	97	(19)
Tables: Who Pays Tax on U.S. Savings Bond Interest	106	(7)
Equivalent Yield Needed From A Taxable Bond	113	(1)
SAMPLE FORM: 1998 Form 1099-INT	114	(2)
CHAPTER 9. Dividends and Other Corporate Distributions	116	(11)
SAMPLE FORM: 1998 Form 1099-DIV	125	(2)
CHAPTER 10. Rental Income and Expenses	127	(19)
Tables: Worksheet for Figuring the Limit on Rental Deductions for a Dwelling Unit Used as a Home	136	(4)
MACRS Recovery Periods for Property Used in Rental Activities	140	(2)
Optional MACRS Tables	142	(4)
CHAPTER 11. Retirement Plans, Pensions, and Annuities	146	(13)
WORKSHEET: Simplified Method/	151	(8)
CHAPTER 12. Social Security and Equivalent Railroad Retirement Benefits	159	(7)
WORKSHEET: Figuring Total Income	161	(5)
CHAPTER 13. Other Income	166	(25)
WORKSHEET: State and Local Income Tax Refund	178	(8)
Table: Are Your Sickness and Injury Benefits Taxable?	186	(5)
CHAPTER 14. Basis of Property	191	(12)
Table: Examples of Adjustments to Basis	194	(9)
CHAPTER 15. Sale of Property	203	(25)
CHAPTER 16. Selling Your Home	228	(9)
CHAPTER 17. Reporting Gains and Losses	237	(12)
Tables: Capital Gains Rate	244	(3)
SAMPLE FORM: Schedule D: Capital Gains and Losses	247	(2)
CHAPTER 18. Individual Retirement Arrangements (IRAs)	249	(22)
Tables: Can I Take a Traditional IRA Deduction?	254	(10)
You Can Contribute to a Roth IRA	264	(1)
You Contribution Limit is Reduced	265	(6)
CHAPTER 19. Moving Expenses	271	(10)
Figure: Illustration of Distance Test	273	(2)
Table: Satisfying the Time Test for Employees and Self-Employed Persons	275	(2)
Figure: Qualifying Moves Within the United States (Non-Military)	277	(4)
CHAPTER 20. Alimony	281	(12)
Table: Alimony Requirements (Instruments executed after 1984)	282	(11)
PART III STANDARD DEDUCTION AND ITEMIZED DEDUCTIONS	293	(128)
Chart: Should I Take the Standard Deduction or Should I Itemize?	294	(1)
CHAPTER 21. Standard Deduction	295	(4)
Tables: Standard Deduction Chart for Most People	297	(1)
Standard Deduction Chart for People Age 65 or Older or Blind	297	(1)
Standard Deduction Worksheet for Dependent	297	(2)
CHAPTER 22. Limit on Itemized Deductions	299	(3)
CHAPTER 23. Medical and Dental Expenses	302	(11)
Table: Medical and Dental Expenses Checklist	305	(6)
Figure: Is Your Excess Medical Reimbursement Taxable?	311	(2)
CHAPTER 24. Taxes You May Deduct	313	(8)
Chart: Which Taxes Can You Deduct?	314	(7)
CHAPTER 25. Interest Expense	321	(14)
Figures: Is My Interest Fully Deductible?	324	(3)
Are My Points Fully Deductible This Year?	327	(5)
Table: Where to Deduct Your Interest	332	(3)
CHAPTER 26. Contributions	335	(16)
Tables: Examples of Charitable Contributions-A Quick Check	337	(4)
Volunteers' Questions and Answers	341	(10)
CHAPTER 27. Casuality and Theft Losses	351	(15)
Tables: Deduction Limit Rules	360	(1)
When To Deduct a Loss	361	(1)
Listing: Designated Disaster Areas	362	(4)
CHAPTER 28. Car Expenses and Other Employee Business Expenses	366	(32)
Table: Travel Expenses You Can Deduct	369	(11)
Figures: Does the 50% Limit Apply to Your Expenses?	380	(2)
When are Local Transportion Expenses Deductible?	382	(6)
Tables: How To Prove Certain Business Expenses	388	(6)
Reporting Travel, Entertainment, Gift, and Car Expenses and Reimbursements	394	(3)
SAMPLE FORM 2106-EZ: Unreimbursed Employee Business Expenses	397	(1)
CHAPTER 29. Employees' Educational Expenses	398	(9)
Figure: Does Your Education Qualify?	400	(7)
CHAPTER 30. Miscellaneous Deductions	407	(14)
PART IV FIGURING YOUR TAXES AND CREDITS	421	(62)
CHAPTER 31. How to Figure Your Tax	423	(6)
CHAPTER 32. Tax on Investment Income of Certain Minor Children	429	(9)
Figures: Can You Include Your Child's Income On Your Tax Return?	431	(2)
Do You Have To Use Form 8615 To Figure Your Child's Tax	433	(1)
SAMPLE FORM 8814: Parent's Election To Report Child's Interest and Dividends	434	(3)
SAMPLE FORM 8615: Tax for Children Under Age 14 Who Have Investment Income of More Than $1,400	437	(1)
CHAPTER 33. Child and Dependent Care Credit	438	(14)
Figures: Can You Claim the Credit?	440	(2)
Is a Child of Divorced or Separated Parents a Qualifying Person?	442	(8)
SAMPLE FORM 2441: Child and Dependent Care Expenses	450	(2)
CHAPTER 34. Credit for the Elderly or the Disabled	452	(11)
Figures: Are You a Qualified Individual?	453	(1)
Income Limits	453	(3)
Table: Overall Income Limits	456	(4)
SAMPLE SCHEDULE R: (Form 1040) Credit for the Elderly or the Disabled	460	(3)
CHAPTER 35. Child Tax Credit	463	(3)
WORKSHEET: Child Tax Credit	465	(1)
CHAPTER 36. Education Credits	466	(5)
SAMPLE FORM 8863: Education Credits (Hope and Lifetime Learning Credits)	470	(1)
CHAPTER 37. Other Credits Including the Earned Income Credit	471	(12)
WORKSHEETS: How to Figure the Credit if You Did Not Work for a Railroad	474	(1)
If You Worked for a Railroad	475	(2)
Checklist: Earned Income Credit at a Glance	477	(1)
Table: Examples of Earned Income for the Earned Income Credit	478	(3)
Checklist: Earned Income Credit (EIC) Eligibility Checklist	481	(2)
PART V SPECIAL SITUATIONS AND TAX PLANNING	483	(76)
CHAPTER 38. If You Are Self-Employed: How to File Schedule C	485	(23)
SAMPLE FORMS: Schedule C (Form 1040)	503	(2)
Schedule SE (Form 1040)	505	(2)
Form 8829	507	(1)
CHAPTER 39. Mutual Funds	508	(11)
SAMPLE FORM: (1099-DIV) Dividends and Distributions	511	(2)
Tables: Reporting Mutual Fund Distribution on Form 1040	513	(1)
Choosing a Cost Basis Method	514	(1)
Mutual Fund Activity	515	(4)
CHAPTER 40. The Gift Tax	519	(4)
CHAPTER 41. What to Do If You Employ Domestic Help	523	(7)
Tables: IRS Offices for EIN Application	525	(1)
What is Taxable Compensation	526	(1)
Figure: Worksheet for Domestic Employee's Wages	527	(2)
SAMPLE FORM: Schedule H(From 1040) Household Employment Taxes	529	(1)
CHAPTER 42. U.S. Citizens Working Abroad: Tax Treatment of foreign Earned Income	530	(5)
CHAPTER 43. Foregin Citizens Living in the United States	535	(6)
CHAPTER 44. How to Prepare for Your Accountant	541	(3)
Checklist: What to Bring to Your Accountant	542	(1)
Table: Check Analysis	543	(1)
CHAPTER 45. If Your Return Is Examined	544	(10)
CHAPTER 46. Planning Ahead for 1999 and Beyond	554	(5)
Personal Records and Advisors	557	(2)
PART VI FILLING OUT YOUR TAX RETURN AND TAX FORMS YOU CAN USE	559	(140)
CHAPTER 47. Filling Out Form 1040	561	(33)
CHAPTER 48. 1997 Federal Tax Forms and Schedules You Can Use	594	(85)
Form SS-4: Application for Employer Identification Number	595	(2)
Form SS-5: Application for a Social Security Card	597	(2)
Form 709: United States Gift (and Generation-Skipping Transfer) Tax Return	599	(4)
Form 1040X: Amended U.S. Individual Income Tax Return	603	(2)
Form 1040EZ: Income Tax Return for Single and Joint Filers With No Dependents	605	(2)
Form 1040A: U.S. Individual Income Tax Return	607	(8)
Schedule 1: Interest and Ordinary Dividends for Form 1040A Filers	609	(2)
Schedule 2: Child and Dependent Care Expenses for Form 1040A Filers	611	(2)
Schedule 3: Credit for the Elderly or the Disabled for Form 1040A Filers	613	(2)
Form 1040: U.S. Individual Income Tax Return	615	(20)
Schedule A: Itemized Deductions	617	(1)
Schedule B: Interest and Ordinary Dividends	618	(1)
Schedule C: Profit or Loss from Business (Sole Proprietorship)	619	(2)
Schedule D: Capital Gains and Losses	621	(2)
Schedule E: Supplemental Income and Loss	623	(2)
Schedule EIC: Earned Income Credit	625	(2)
Schedule F: Profit or Loss From Farming	627	(2)
Schedule H: Household Employment Taxes	629	(2)
Schedule R: Credit for the Elderly or the Disabled	631	(2)
Schedule SE: Self-Employment Tax	633	(2)
Form 1116: Foreign Tax Credit	635	(2)
Form 2106: Employee Business Expenses	637	(2)
Form 2441: Child and Dependent Care Expenses	639	(2)
Form 3903: Moving Expenses	641	(2)
Form 4562: Depreciation and Amortization	643	(2)
Form 4684: Casualties and Thefts	645	(2)
Form 4797: Sales of Business Property	647	(2)
Form 4868: Application for Automatic Extension of Time To File U.S. Individual Income Tax Return	649	(2)
Form 4952: Investment Interest Expense Deduction	651	(2)
Form 4972: Tax on Lump-Sum Distributions	653	(2)
Form 5329: Additional Taxes Attributable to IRAs, Other Qualified Retirement Plans, Annuities, Modified Endowment Contracts, and MSAs	655	(2)
Form 6198: At-Risk Limitations	657	(2)
Form 6251: Alternative Minimum Tax-Individuals	659	(2)
Form 8283: Noncash Charitable Contributions	661	(2)
Form 8615: Tax for Children Under Age 14 Who Have Investment Income of More Than $1,400	663	(2)
Form 8812: Additional Child Tax Credit	665	(2)
Form 8814: Parents' Election To Report Child's Interest and Dividends	667	(2)
Form 8822: Change of Address	669	(2)
Form 8824: Like-Kind Exchanges	671	(2)
Form 8829: Expenses for Business Use of Your Home	673	(2)
Form 8839: Qualified Adoption Expenses	675	(2)
Form 8863: Education Credits (Hope and Lifetime Learning Credits)	677	(2)
CHAPTER 49. Tax Tables and Tax Rate Schedules	679	(20)
1998 Tax Tables	680	(12)
1998 Tax Rate Schedules	692	(1)
List of IRS Forms and Publications	693	(1)
How to Get Forms and Publications	694	(1)
What Is Tele Tax?	695	(2)
Call the IRS With Your Tax Questions	697	(2)
A GLOSSARY OF TAX AND FINANCIAL TERMS	699	(7)
INDEX	706