Zondervan 2006 Minister's Tax and Financial Guide: For 2005 Returns (Zondervan Minister's Tax & Financial Guide) [Paperback]

Dan Busby CPA (Author)

Book Description

Publication Date: December 27, 2005 | Series: Zondervan Minister's Tax & Financial Guide

'Enormously helpful, clear, and comprehensive.' --Publishers Weekly ReligionBookLine The most understandable, easy-to-follow tax guide of its kind---explains complex tax concerns in plain language. For years, ministers have trusted the Zondervan Minister's Tax and Financial Guide to save them time and money. This easy-to-understand workbook simplifies the tax code and offers dozens of tips to reduce your tax bill. For 2006, the guide includes a line-by-line explanation of the 1040 Form as well as information on recent changes in the tax code. Dan Busby also explains the easy steps you can take now to minimize next year's tax bill. This 2006 edition includes: * Sound retirement planning helps * Compensation planning guidance * Maximizing business expense reimbursements * Understanding medical expense reimbursements This publication is also useful to church treasurers and business administrators and to tax preparers who assist ministers. 'Dan Busby masterfully presents these complex issues in a concise, easy-to-understand format.' Simeon May, CPA, Executive Director, National Association of Church Business Administration 'A good reference guide to have at your fingertips through the year.' Nazarene Pensions and Benefits Office 'Sound and knowledgeable advice...written in plain English.' Larry Burkett

Editorial Reviews

About the Author

Dan Busby is a certified public accountant with a Masters degree in business from Emporia State University. He has worked as controller of a university medical center, partner-founder of a CPA firm, and chief financial officer for a religious denomination. He currently serves as the president with the Evangelical Council for Financial Accountability, Washington, D.C, and is he coauthor of The Christian's Guide to Worry-Free Money Management.

Excerpt. © Reprinted by permission. All rights reserved.

The Zondervan Minister's Tax and Financial Guide: 2006 Edition Copyright 2006 by Dan Busby For information, write to: Zondervan, Grand Rapids, Michigan 49530 Publisher's note: This guide is published in recognition of the need for clarification of the income tax laws for ministers. Every effort has been made to publish a timely, accurate, and authoritative guide. The publisher, author, and reviewers do not assume any legal responsibility for the accuracy of the text or any other contents. Taxpayers are cautioned that this book is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. You should seek the professional advice of a tax accountant, lawyer, or preparer for specific tax questions. References to IRS forms and tax rates are derived from preliminary proofs of the 2005 forms or 2004 forms and some adaptation for changes may be necessary. These materials should be used solely as a guide in filling out your 2005 tax return. To obtain the final forms, schedules, and tables for filing your return, contact the IRS or a public library. ISBN-10: 0-310-26216-X ISBN-13: 978-0-310-26216-9 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means---electronic, mechanical, photocopy, recording, or any other--- except for brief quotations in printed reviews, without the prior permission of the publisher. Printed in the United States of America We want to hear from you. Please send your comments about this book to us in care of [e-mail]. Thank you. 2005 tax changes Some of the key 2005 changes follow: Child tax credit increase. If you are a parent, stepparent, foster parent, or grandparent with dependent children under age 17, you will enjoy the child tax credit. It is refundable to the extent of 15% of the taxpayer's income in excess of $11,000. The maximum child credit amount for 2004 through 2010 is $1,000 per year. Earned income credit. For 2005, 'low income' generally means families (married filing jointly) with taxable and nontaxable earned income of less than $12,490 if there is no qualifying child, less than $31,338 if there is one qualifying child, and those who earned less than $34,458 and have two or more children. Investment income. The amount of investment income children under age 14 can receive before it is taxed at their parents' maximum tax rate is $1,600 for 2005. Standard deductions and personal exemptions. The standard deduction and personal exemption amounts, if under age 65, are adjusted as follows: Standard deduction: 2003 2004 2005 Married couples $9,500 $9,700 $10,000 Head of household 7,000 7,150 7,300 Single 4,750 4,850 5,000 Dependent children (1) 750 800 (1) 800 (1) Personal exemption 3,050 3,100 3,200 (1) $800 or $250 plus the individual's earned income up to the single standard deduction amount, whichever is greater. College cost deduction. A $4,000 deduction for 2005 may be claimed for college costs by itemizers and nonitemizers alike. This provision is repealed after 2005. Standard mileage rates. The IRS increased the business and medical mileage rates effective January 1, 2005, and then another significant increase became effective on September 1, 2005. The optional standard mileage rates for employees to use in computing the deductible costs in connection with the operation of a passenger automobile for business, charitable, medical, or moving expense purposes are as follows (for more information, see page 109-10): 2005 Rate 2005 Rate 1/1/05 to 8/31/05 9/1/05 to 12/31/05 2004 Rate Type of Expense (per mile) (per mile) (per mile) Business 40.5 cents 48.5 cents 37.5 cents Charitable 14 cents 14 cents (1) 14 cents Moving/Medical 15 cents 22 cents 14 cents (1) The rate is 29 cents a mile for Hurricane Katrina--related volunteer work from August 25 to August 31, 2005, and 34 cents a mile from September 1 to December 31, 2005. Social security taxable limit increases. The maximum amount of taxable and creditable annual earnings subject to the social security and self-employment income tax increased to $90,000 in 2005, up from $87,900 in 2004. There is no maximum wage base for Medicare. The 2006 wage base is expected to be $93,000. Increase in unified estate and gift tax exemption The exemption from federal estate taxes increases through 2009 as follows (the gift tax exemption is $1,000,000 until 2010): Applicable Year Exemption Amount 2005 $ 1,500,000 2006 through 2008 2,000,000 2009 3,500,000 If your estate is less than $1.5 million, federal estate tax is not a problem. The simplest way to dispose of assets may be to place them in joint ownership with the person whom you wish to receive them, such as a spouse. If your estate is more than $1.5 million, estate tax planning is a must. If married, use both exempt amounts to pass up to $3 million taxfree in 2005. There is no estate tax for those dying in 2010. Without further legislative action, the estate tax law in effect on May 26, 2001, would again become effective on January 1, 2011. A donor may exclude the first $11,000 (2005 limitation) of gifts made to any donee in determining the amount of taxable gifts made. 2005 clean-fuel auto special tax deduction Buyers of these clean-fuel autos can deduct up to $2,000 (up to $5,000 of the cost of a truck or van with a gross vehicle weight above 26,000 pounds) for 2005 and $500 for 2006 of the cost of the car on their tax returns. However, the proper place for the write-off is difficult to find. The deduction goes on line 34 of Form 1040. No deduction will be allowed after 2006. The tax break is available even if the purchaser takes the standard deduction. Larger clean-fuel vehicles get even bigger deductions, up to $5,000 for a light truck or van. The deduction is phased out by 25% for vehicles placed in service in calendar year 2004, by 50% in 2005, and 75% in 2006. The following autos have been certified by the IRS: Model Year Toyota Highlander Hybrid 2006 Ford Escape Hybrid 2005 Toyota Prius 2001 through 2005 Honda Insight 2000 through 2005 Honda Civic Hybrid 2003 and 2005 Lexus RX 400h 2006 Honda Accord Hybrid 2005 For hybrid cars purchased after 2005, a credit is available of between $650 and $3,400, depending on estimated lifetime fuel savings, plus an extra credit that is based on overall fuel economy. The credit will phase out quickly. When an auto manufacturer sells its 60,000th hybrid vehicle (that is the total per manufacturer, not 60,000 per model), the phaseout starts at the beginning of the second subsequent calendar quarter. Foreign earned income exclusion The foreign earned income credit for qualified individual U.S. citizens or residents who reside in foreign countries is $80,000. For any tax year after 2007, the $80,000 amount is increased by multiplying the dollar amount of the limitation by the cost-of-living adjustment for the calendar year in which the tax year begins. The increase will then be rounded to the next lowest multiple of $100. Pension contribution limits The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001 contained provisions for the relaxation of key limits on pension nonprofit plans: _ Change to maximum exclusion allowance or 403(b) plans. For 2005, the maximum exclusion allowance is $42,000 or 100% of compensation, whichever is less. _ Change in salary reduction contribution limits to 403(b) plans. The 403(b) and 401(k) contribution limits increased from $13,000 in 2004 to $14,000 in 2005. The limit is capped at $15,000 in 2006 and subsequently is indexed in increments of $500.

Product Details

• Reading level: Ages 18 and up
  
• Paperback: 192 pages
• Publisher: Zondervan; Revised edition (December 27, 2005)
• Language: English
• ISBN-10: 031026216X
• ISBN-13: 978-0310262169
• Product Dimensions: 9.1 x 7.3 x 0.5 inches
• Shipping Weight: 10.4 ounces
• Average Customer Review: 5.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #2,520,223 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

1 of 1 people found the following review helpful:

5.0 out of 5 stars Minister Taxation is a whole different ballgame, August 21, 2006

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L. T. Gordon - See all my reviews

This review is from: Zondervan 2006 Minister's Tax and Financial Guide: For 2005 Returns (Zondervan Minister's Tax & Financial Guide) (Paperback)

Aknowledged as one of the more difficult areas of personal taxation, this clearly stated guide offers very relevant information and advice. I found the book so useful since purchasing it two years ago, that I have purchased the latest version.
Even though I am a CPA, I still find the tax code challenging as well as boring. This resource is logically organized, well indexed and easily understood. Thank you!