Rate cuts, return of standard deduction only two of the many changes affecting individuals

Article Abstract:

The Tax Reform Act of 1986 will affect individual taxpayers in the following ways: (1) no taxation of families below the poverty level, (2) new tax rate schedules, (3) addition of an optional standard deduction, (3) minimization of the taxation "marriage penalty," (4) provision of an earned income credit on the first $5,000 of personal income, in certain circumstances, (5) reinstatement of effective income averaging, (6) increase in the estimated tax payments for individuals from 80 percent of the current year tax liability to 90 percent, (7) taxation of unemployment benefits received (since such benefits replace wages), (8) exclusion of scholarships and grants received from students' tax returns, (9) inclusion of prizes and awards received by individuals in their taxable income amounts, and (10) exemptions for employee achievements awards, such that these awards will not be taxed. A detailed discussion and analysis of these changes in individuals' taxation under the new law are provided, along with sample reporting techniques and effective dates (where appropriate).

United States, Analysis, Interpretation and construction, Tax law, Tax reform, Persons

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Travel and moving expenses for multistate workers

Article Abstract:

Individuals travelling to temporary out-of-town job locations, commuting between work locations or relocating for employment reasons can deduct expenses connected to travelling to and from business sites from one state to another. Deductible expenses include cost of in-route transportation as well as such living expenses as utilities, meals and lodging. Some of the moving expenses incurred by relocating taxpayers may also be deducted. Travel expenses between job locations can be deducted under Sec. 162 as trade or business expenses. Additional rules for deducting such expenses are found in 'Flowers' case. For moving expenses, the Revenue Reconciliation Act of 1993 increased the distance threshold from 35 miles to 50 miles. Commuting expenses to another business location can be deducted if the taxpayer operates from home. State and local taxation should likewise be considered when deducting expenses.

Business travel, Commuters, Employee relocation

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