Important Changes for 2000

The following are some of the tax changes for 2000. For information on other changes, see Publication 553, Highlights of 2000 Tax Changes.

Accounting methods. Certain small business taxpayers may be eligible to adopt or change to the cash method of accounting and may not be required to account for inventories. For more information, including the definition of a small business taxpayer, see Publication 553.

Health insurance deduction for the self-employed. For 2000, this deduction is 60% of the amount you paid for medical insurance for yourself and your family. For more information, see Insurance in chapter 8.

Paid preparer authorization. Beginning with your return for 2000, you can check a box and authorize the IRS to discuss your tax return with the paid preparer who signed it. If you check the "Yes" box in the signature area of your return, the IRS can call your paid preparer to answer any questions that may arise during the processing of your return. Also, you are authorizing your paid preparer to perform certain actions. See your income tax package for details.

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.

Section 179 deduction. For 2000, the total cost you can elect to deduct under section 179 of the Internal Revenue Code is increased to $20,000. For information on the section 179 deduction, see Depreciation in chapter 8.

Self-employment tax. The maximum net self-employment earnings subject to the social security part (12.4%) of the self-employment tax increased to $76,200 for 2000. For more information, see Self-Employment Tax in chapter 1.

Standard mileage rate. The standard mileage rate for the cost of operating your car, van, pickup, or panel truck in 2000 is 32 1/2 cents a mile for all business miles. See Car and Truck Expenses in chapter 8.

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