Publication 553 - Highlights Of 2002 Tax Changes Page 7
ADVERTISEMENT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31other health insurance coverage except permitted cover-
For information on empowerment zones and enterprise
age. The pilot program for MSAs that was scheduled to
communities, see Publication 954, Tax Incentives for Em-
powerment Zones and Other Distressed Communities.
end December 31, 2002, has been extended until Decem-
ber 31, 2003. For more information, see Publication 969,
Increased section 179 deduction for businesses in the
Medical Savings Accounts (MSAs).
New York Liberty Zone. You may be able to claim an
increased section 179 deduction if you place property in
Obesity as a Disease
service in the New York Liberty Zone (Liberty Zone). The
increase can be as much as $35,000 for 2002, but it cannot
The cost of participation in a weight-loss program as a
be more than the cost of qualified property which is section
treatment for the disease of obesity is an amount paid for
179 property placed in service during the year. See chap-
medical care. However, the cost of purchasing
ter 2 in Publication 946.
reduced-calorie diet foods is not a medical expense if
Reduced section 179 dollar limit for Liberty Zone prop-
these foods substitute for food you would normally con-
erty exceeding $200,000. Generally, you must reduce
sume to satisfy your nutritional requirements. For more
the dollar limit on the section 179 deduction for a year by
information, see Weight-Loss Program under What Medi-
the cost of qualifying section 179 property placed in service
cal Expenses Are Deductible and under What Expenses
in the year that is more than $200,000. In 2002, you take
Are Not Deductible in Publication 502, Medical and Dental
into account only 50% (instead of 100%) of the cost of
Expenses.
section 179 property that is qualified Liberty Zone property
placed in service in the year. See chapter 2 in Publication
Pending Legislation Regarding
946.
Charitable Contributions
Depreciation limits on business cars and electric
vehicles. The total section 179 deduction and deprecia-
There are cautions in Publication 17, Your Federal Income
tion (including the special depreciation allowance) you can
Tax, regarding legislation that was pending in the fall of
take on a car (that is not an electric vehicle) you use in your
2002. At that time, Congress was considering legislation
business and first place in service in 2002 is generally
that would allow:
$7,660. For an electric vehicle, the amount is generally
$22,980. For the maximum depreciation you can deduct in
1) Individuals to deduct a portion of their charitable con-
later years, see Maximum Depreciation Deduction in chap-
tributions even if they do not itemize deductions on
ter 5 of Publication 946.
Schedule A (Form 1040),
Meal Expenses When Subject to
2) An enhanced deduction for charitable contributions
made after 2002 of literary, musical, artistic, and
“Hours of Service” Limits
scholarly compositions, and
Generally, you can deduct only 50% of your business-re-
3) Tax-free distributions from IRAs for charitable pur-
lated meal expenses while traveling away from your tax
poses.
home for business purposes. You can deduct a higher
None of these became law in 2002.
percentage if the meals take place during or incident to any
period subject to the Department of Transportation’s
Depreciation and Section 179
“hours of service” limits. (These limits apply to workers who
are under certain federal regulations.) The percentage is
Deduction
65% for 2002 and 2003. Business meal expenses are
covered in chapter 1 of Publication 463, Travel, Entertain-
ment, Gift, and Car Expenses.
Special depreciation allowance. You can take a special
depreciation allowance (or Liberty Zone depreciation al-
Self-Employed Health Insurance
lowance) for qualified property (or Liberty Zone property)
you place in service during 2002 (and later years). The
Deduction
allowance is an additional deduction of 30% of the
property’s depreciable basis. See chapter 3 in Publication
For 2002, this deduction increases to 70% of the amount
946, How To Depreciate Property.
paid for medical and qualified long-term care insurance for
you and your family. For more information, see chapter 7 in
Increased section 179 deduction for enterprise zone
Publication 535, Business Expenses.
businesses. You may be able to claim an increased sec-
tion 179 deduction if your business qualifies as an enter-
Electric and Clean-Fuel Vehicles
prise zone business. The increase can be as much as
$35,000 (up from $20,000) for 2002 and later years, but it
The maximum clean-fuel vehicle deduction and qualified
cannot be more than the cost of qualified zone property
electric vehicle credit were scheduled to be 25% lower for
that is section 179 property placed in service in an em-
2002 and both were scheduled to be phased out com-
powerment zone during the year. See chapter 2 in Publica-
pletely by 2005. The full deduction and credit are now
tion 946.
allowed for qualified property placed in service in 2002 and
Chapter 1 Tax Changes for Individuals
Page 7
ADVERTISEMENT
0 votes
Related Articles
Related forms
Publication 1212 - List Of Original Issue Discount Instruments - Department Of Treasury - 2002
Financial
Change Of Address Notifi Cation For Individual Income Tax Form - Office Of State Tax Commissioner - State Of North Dakota
Financial
Related Categories
Parent category: Financial