Tax Tips From Michelle Biess, CPA (Tax Tip Archive)
January 2001
Although no major new tax legislation was passed in 2000, significant aspects of the current tax provisions
are provided here for your information.
The tax credit for each dependent child under 17 is $500 in 2000 for married couples with income under $110,000 and single parents with income under $75,000.
This credit phases out above these income limits.
The maximum amount you can earn and still collect social security is $10,680 for taxpayers between the ages of 62 and 64.
Social Security recipients age 65 and over no longer have any earnings limitation.
Up to $2,000 in student loan interest is deductible on 2000 returns for loans within the first 60 months of repayment.
This deduction is also phased out for joint taxpayers with income over $75,000 and single taxpayers with income over $55,000.
The standard mileage rate for business travel in 2000 was 32.5 cents per mile.
The rate for medical mileage remains at 10 cents per mile and charitable mileage remains at 14 cents per mile.
For 2001, the
business mileage rate increases to 34.5 cents per mile.
Early withdrawals from an IRA used to pay higher education expenses can be made without the 10% penalty.
In addition, withdrawals of up to $10,000 are permitted for qualified first-time home buyers.
The withdrawal in each case would still be subject to regular income tax.
For 2000, self-employed individuals may deduct 60% of the amount paid for health insurance.
In the area of personal money management, please visit your safe deposit box at least once each year and make a deposit or a withdrawal from all bank accounts so that they won’t be classified as abandoned.
In Washington DC it only takes two years of no activity for an account to be considered abandoned and earning of interest income is not considered a transaction.
Once again, my office offers a full range of tax services including free electronic filing of
income tax returns for 2000.
Direct deposit of tax refunds is available for taxpayers filing either electronically or with paper returns.
Please call my office if you have questions about your tax situation or need assistance with tax planning.
You are also encouraged to send me e-mail at michelle@mbcpa.com.
Lastly, in response to your inquiries, I always welcome new business from good clients like yourself.
Best wishes for a happy and prosperous New Year.
Sincerely,
Michelle M. Biess, CPA