Tax Update New Tax Laws & Other Topics Sheet
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2S T A T E O F I D A H O
TAX UPDATE
VOLUME SIXTEEN – NUMBER ONE
JUNE 2004
This issue of Tax Update deals with new tax laws and other topics. If you have questions about
this material or if you need more information, contact the Idaho State Tax Commission.
Withholding Changes Benefit Businesses
If you’re an employer, you have fewer
WITHHOLDING PAYMENT
taxes withheld in January, February, and March
reports to file with the Idaho State Tax Com-
has a tax period of “03.” For split-monthly
TAX PERIODS
mission as a result of 2004 legislation. As of
filers, the tax period crosses months and is
Your withholding tax period is based on
January 1, 2004, you no longer need to file
based on how you’re paying the taxes withheld.
your filing cycle. For monthly filers, the with-
a quarterly withholding return (Form 958).
Please refer to page 13 of A Guide to Income
holding tax period reflects the month you
Instead, you will make income tax with-
Tax Withholding to find detailed charts
holding payments based on your filing
that help you determine the tax period.
cycle. You will use the Form 956 to recon-
You can also find the charts on our Web
cile your payments annually with the
site (click on the Withholding News but-
actual amount of tax you withheld. The
ton, FAQs, then FAQ #909).
Form 956 is due on January 31.
RECORD OF IDAHO
We sent information to employers in
WITHHOLDING PAYMENTS
March and April and mailed a revised
edition of A Guide to Income Tax With-
You should track your payments by your
holding at the end of May. For more informa-
withheld income tax from your employees’
filing cycle period to help you reconcile the pay-
tion about the withholding changes, call us or
wages. For example, payment for taxes with-
ments with the actual amount of tax you with-
visit our Web site at (click
held in January has a tax period of “01.”
held at the end of the year. The Tax Commission
on the Withholding News button).
For quarterly filers, the withholding tax
has created a Record of Idaho Withholding
While the withholding changes have been
period reflects the last month of the quarter
Payments to help you with this. You can get a
relatively smooth, there are some points we’d
for which you withheld income tax from your
copy on our Web site (click on the Withholding
like to emphasize.
employees’ wages. For example, payment for
News button).
Idaho Adopts One Federal
New Businesses
Can Register
Depreciation Law, But Not Another
Electronically
The 2004 Idaho Legislature adopted the
required to adjust or add back this federal
increase in the IRC section 179 “expense
deduction when preparing your Idaho return.
Idaho’s business registration form is now
deduction.” Section 179 allows you to elect
However, Idaho did not adopt the first-
available online at business.idaho.gov .
to expense the cost of depreciable property
year “bonus depreciation” provisions permit-
Currently, the electronic application can
purchased for use in the active conduct of a
ted by subsection (k) of IRC section 168.
only be used to sign up new business accounts.
trade or business in the year the property is
If you claimed the bonus depreciation for
Any changes to an existing business must be
placed in service, rather than depreciate the
federal purposes, you must compute a sepa-
made using the paper application. The elec-
property over a number of years. Federal law
rate depreciation schedule each year for
tronic business registration lets owners apply
increased the maximum amount you can
Idaho income tax purposes. In the first year
for the following accounts: sales tax, use tax,
deduct under section 179 in 2003 through
of ownership, the difference will be added to
income tax withholding, unemployment insur-
2005, from $25,000 to $100,000. If you
income; in later years, the difference will be
ance, Boise auditorium district tax, and travel
elect to claim the expense, you are not
subtracted from income.
and convention tax.
continued on back
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