Taxes for Dummies 2004 Book

	Introduction	1
	What's New in This Edition	1
	Why Buy This Tax Book?	1
	Your Tax Road Map	2
Part I	Getting Ready to File	5
Chapter 1	The U.S. Tax System and Rates	7
	Understanding Our Tax System	8
	Understanding Your Income Tax Rates	11
Chapter 2	Tax Return Preparation Options and Tools	17
	Doing Your Own Return	17
	Using IRS Publications	18
	Perusing Tax-Preparation and Advice Guides	19
	Buying Software	19
	Accessing Internet Tax Resources	20
	Hiring Help	22
	Finding Tax Preparers and Advisors	25
Chapter 3	Getting and Staying Organized	27
	Keeping Good Records	28
	Reconstructing Missing Tax Records	30
	Requesting Copies of Lost Tax Returns	35
	Understanding the Cohan Rule	36
Chapter 4	No Form Fits All (Or, What Kind of Taxpayer Are You?)	39
	What Rendition of 1040 Shall We Play?	39
	Choosing a Filing Status	41
	Protecting Yourself with the Innocent Spouse Rule	49
	Figuring Personal and Dependent Exemptions	52
	Securing Social Security Numbers for Dependents	56
	Filing a Return for a Deceased Taxpayer	57
	Must I File?	58
	A Final Bit of Advice	61
Part II	Tackling the Various Forms 1040	63
Chapter 5	Easy Filing: 1040EZ and 1040A	65
	Who Can File a 1040EZ?	65
	Filling Out a 1040EZ	66
	Who Can File a 1040A?	71
	Final Instructions	89
Chapter 6	Form 1040: Income Stuff	91
	Lines 6a-6d: Exemptions	91
	Lines 7-22: Income	92
Chapter 7	Form 1040, Part II: Adjustments to Income Stuff	123
	Adjusted Gross Income	123
Chapter 8	The Rest of the 1040 and Other Yucky Forms	149
	Tax Computation	149
	Credits: Lines 44 to 52	159
	Other Taxes	169
	Payments	171
	Refund or Amount You Owe	175
	Finishing Up	177
Part III	Filling Out Schedules and Other Forms	179
Chapter 9	Itemized Deductions: Schedule A	181
	The Standard Deduction	181
	Itemized Deductions	183
	Lines 1-4: Medical and Dental Costs	185
	Lines 5-9: Taxes You Paid	192
	Lines 10-14: Interest You Paid	195
	Lines 15-18: Gifts to Charity	200
	Line 19: Casualty and Theft Losses	204
	Victims of Terrorist Attacks	204
	Lines 20-26: Job Expenses and Most Other Miscellaneous Deductions	207
	Line 27: Other Miscellaneous Deductions	217
	Line 28: Total Itemized Deductions	218
Chapter 10	Interest and Dividend Income: Schedule B	221
Part I	Lines 1-4: Interest Income	223
Part II	Lines 5 and 6: Dividend Income	229
Part III	Lines 7-8: Foreign Accounts and Trusts	233
Chapter 11	Profit or Loss from Business: Schedule C	235
	Schedule C-EZ	235
	Schedule C	236
	Basic Information (A-E)	237
	Accounting Method Stuff (F-H)	237
Part I	Lines 1-7: Income	238
Part II	Lines 8-27: Expenses	240
	Operating Loss	262
Chapter 12	Capital Gains and Losses: Schedule D	265
	Collectibles and Real Estate	266
	Tax Basis Background	266
	What Part of Schedule D?	268
	Schedule D: Columns	268
	Figuring Your Profit or Loss	270
Part I	Lines 1-7a and b: Short-Term Capital Gains and Losses--Assets Held One Year or Less	272
Part II	Lines 8-16: Long-Term Capital Gains and Losses--Assets Held More than One Year	273
Part III	Lines 17-20: Summary of Parts I and II	278
	Using Schedule D When You Sell Your Home	280
	Use Schedule D for Other Issues Involving Stocks (Worthless and Otherwise)	284
	Using Schedule D for Nonbusiness Bad Debts	289
Chapter 13	Supplemental Income and Loss: Schedule E	291
Part I	Income or Loss from Rental Real Estate and Royalties	291
Part II	Income or Loss from Partnerships and S Corporations	298
Part III	Income or Loss from Estates and Trusts	300
Part IV	Lines 38-39: Income or Loss from Real Estate Mortgage Investment Conduits (REMIC)	300
Part V.	Summary	300
Chapter 14	Profit or Loss from Farming: Schedule F	301
	Basic Information (Lines A-E): Accounting Method Stuff	301
Part I	Lines 1-11: Income	303
Part III	Lines 12-34: Expenses	307
	Tax Issues Specific to Farmers	326
Chapter 15	Other Schedules and Forms to File	329
	Form 1040-ES, the Estimated Tax Form	329
	Form 2441, Child and Dependent-Care Expenses	332
	Form 3903, Moving Expenses	334
	Form 8606, Nondeductible IRAs	336
	Forms 8615 and 8814, the Kiddie Tax	340
	Form 8829, Expenses for Business Use of Your Home	341
	Form W-4, Employee Withholding	344
	Schedule H: Nanny Tax	346
	Schedule SE: Self-Employment Tax Form	347
	Schedule R: Credit for the Elderly or the Disabled	349
Part IV	Audits and Errors: Dealing with the IRS	351
Chapter 16	The Dreaded Envelope I: IRS Notices	353
	Finding Strength in Numbers	353
	Understanding the IRS Notice Process	354
	Assessing Assessment Notices	356
	Collection Due Process Hearing	360
	Handling Nonassessment Notices	362
Chapter 17	The Dreaded Envelope II: Audits	367
	What You Should Know about Audits	367
	Surviving the Four Types of Audits	368
	Questioning Repetitive Audits	371
	Getting Ready for an Audit	372
	Winning Your Audit	373
	Understanding the Statute of Limitations on Audits	374
Chapter 18	Fixing Mistakes the IRS Makes	377
	Pointing the Finger: Common IRS Flubs	377
	Fixing IRS Mistakes: Fight Fire with Fire	378
	Sending a Simple Response to a Balance Due Notice	380
	Sending Generic Responses to Generic Notices	380
	Getting Attention When the IRS Ignores You	386
	Finding Your Refund When It Doesn't Find You	388
Chapter 19	Fixing Your Own Mistakes	391
	Amending a Return	391
	When You Can't Pay Your Taxes	393
	Abating a Penalty	398
	Abating Interest	404
	The Taxpayer Bill of Rights	406
	The Taxpayer Bill of Rights--Parts 2 and 3	407
Part V	Year-Round Tax Planning	409
Chapter 20	Tax-Wise Personal Finance Decisions	411
	Taxing Mistakes	412
	The Causes of Bad Tax Decisions	415
Chapter 21	Reducing Taxes with Retirement Accounts	419
	Retirement Account Benefits	419
	Types of Retirement Accounts	422
	Taxing Retirement Account Decisions	433
Chapter 22	Small Businesses and Tax Planning	439
	Organizing Your Business Accounting	439
	Minimizing Your Small-Business Taxes	442
	To Incorporate or Not to Incorporate	447
	Investing in Someone Else's Business	450
	Buying or Selling a Business	451
Chapter 23	Your Investments and Taxes	453
	Tax-Reducing Investment Techniques	453
	Tax-Favored Investments to Avoid	459
	Annuities	462
	Selling Decisions	463
Chapter 24	Real Estate and Taxes	469
	Real Estate Tax Breaks	469
	Purchasing Your Own Palace	472
	Making Tax-Wise Mortgage Decisions	476
	Selling Your House	479
	Investing in Real Estate	481
Chapter 25	Kids and Taxes	485
	Bringing Up Baby	485
	Education Tax Breaks and Pitfalls	489
	Taxes on Your Kiddies' Investments	494
Chapter 26	Estate Planning	499
	Figuring Whether You May Owe Estate Taxes	499
	How High Are Estate Taxes?	501
	Reducing Expected Estate Taxes (If You're Rich)	502
Part VI	The Part of Tens	511
Chapter 27	Ten Important Tax Law Changes	513
Chapter 28	Ten Important Tax Questions	519
Chapter 29	Ten Tips for Reducing Your Chances of Being Audited	523
Chapter 30	Ten Offen-Overlooked Tax-Reduction Opportunities	527
Chapter 31	Ten Interview Questions for Tax Advisors	531
Appendix	A Little More about the IRS	535
	Index	609