On October 22, 2004, the President signed the American Jobs Creation Act of 2004. Unlike most recent tax legislation, the new law is "revenue neutral." It includes about $140 billion worth of good news for taxpayers in the form of new and expanded breaks. These are offset by about $140 billion worth of bad news in the form of revenue raisers.
There are literally hundreds of changes. Many will not affect you, your family, or your business. However, a good number of the changes may make a difference. This letter covers the provisions we think are most likely to fit into the latter category.
Individuals
New Deduction for State and Local Sales Taxes
The 2004 Jobs Act allows individuals the option of claiming an itemized deduction for either general state and local sales taxes or state income taxes, but not both. This change is intended to put those who live in jurisdictions with low or no personal income taxes on an equal footing with those who are able to deduct state and local
