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Limited Liability Company
An LLC may be classified for Federal income tax purposes either as a partnership, a corporation, or an entity disregarded as an entity separate from its owner by applying the rules in Regulations section 301.7701-3. See Form 8832, Entity Classification Election, for more details.
Electric and Clean-Fuel Vehicles
For vehicles placed in service in 2004, the maximum clean-fuel vehicle deduction and qualified electric vehicle credit are scheduled to be reduced by 25%, as compared to 2003.
Earned Income Credit
A tax credit for certain people who work, meet certain requirements, and have earned income under a specified limit.
Standard Mileage Rate
For 2004, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck is increased to 37.5 cents a mile for all business miles.
Work Opportunity Credit and Welfare-to-Work Credit
The work opportunity credit and the welfare-to-work credit are scheduled to expire for wages paid to individuals who began working for you after 2003.
Excise tax
A tax on the sale or use of specific products or transactions.
Federal income tax
The federal government levies a tax on personal income. The federal income tax provides for national programs such as defense, foreign affairs, law enforcement, and interest on the national debt.
Federal Insurance Contributions Act (FICA) Tax
Provides benefits for retired workers and their dependents as well as for disabled workers and their dependents. Also known as the Social Security tax.
Dependency exemption
Amount that taxpayers can claim for their eligible dependents. Each exemption reduces the income subject to tax. The exemption amount is a set amount that changes from year to year.
Exemptions
Amount that taxpayers can claim for themselves, their spouses, and eligible dependents. There are two types of exemptions-personal and dependency. Each exemption reduces the income subject to tax. The exemption amount is a set amount that changes from year to year.
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