The explanations and examples in this publication reflect the interpretation by
the Internal Revenue Service (IRS) of tax laws enacted by Congress, Treasury regulations,
and Court decisions.
However, the information given does not cover every situation and is not
intended to replace the law or change its meaning.
This publication covers some subjects on which a court may have made a decision
more favorable to taxpayers than the interpretation by the IRS. Until these differing
interpretations are resolved by higher court decisions or in some other way, this
publication will continue to present the interpretation by the IRS.
This publication highlights tax law changes that take effect in
1999 and 2000. Each chapter is divided into separate sections for each
Many of the provisions of the Ticket to Work and Work Incentives
Improvement Act of 1999 and other tax law changes are discussed in
this publication. They include the following items.
- Change in the definition of an eligible foster child for
purposes of the earned income credit.
- Deducting stop-smoking programs as medical expenses.
- Extension of the credit for first-time homebuyers in the
District of Columbia.
- Extension of certain general business credits.
- Extension of the tax-free status of up to $5,250 of
employer-provided educational assistance.
- Increase in the health insurance deduction for the
- Postponement of tax deadlines because of Y2K
- Repeal of the installment method for most accrual method
See the later discussion of each topic for more information.
Adjusting your withholding or estimated tax payments for
If your tax for 2000 will be more or less than your 1999 tax, you
may need to adjust your withholding or estimated tax payments
accordingly. If your tax is decreasing, you can get the benefit of
lower taxes throughout the year. If you will owe more tax, you can
avoid a penalty when you file your tax return.
See the following table for forms and publications that will help
you adjust your withholding or estimated tax payments. See chapter 8
for information on ordering forms and publications.
Photographs of missing children.
The Internal Revenue Service is a proud partner with the National
Center for Missing and Exploited Children. Photographs of missing
children selected by the Center may appear in this publication on
pages that would otherwise be blank. You can help bring these children
home by looking at the photographs and calling:
1-800-THE-LOST (1-800-843-5678) if you recognize a child.
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