IRS and states provide tax information & forms online

Do you know if there is a web-site where I can
get IRS publications?

B.B., Indianapolis

As backwards as the IRS sometimes seems, they are right
up there in the world of high technology when it comes to a presence on the
Internet. You can download tax forms, publications, and recent tax news from the
IRS' s own web site at http://www.irs.ustreas.gov/prod/cover.html.
In addition, you can obtain Indiana forms at http://www.ai.org/dor/. Nearly every state has
tax forms available online. You can search for tax forms from states at http://shell5.ba.best.com/~ftmexpat/html/taxsites.html
and at http://www.taxsites.com/. These
Internet locations may not see much activity most of the year, but near the
April 15 deadline, they are some of the hottest sites on the Web. Of course
there's always http://www.funwithtaxes.com  which just happens to have interesting tax tips, advise and links to tax forms, publications and many other interesting tax related materials.

My wife heard from a friend at work that there
is a tax credit on state taxes for $500 per child. Is this true and if so, where
on the tax form, do I take this credit?

J.R., Indianapolis

Beginning with the 1997 tax year, Indiana offers a $500 tax exemption for children who are claimed as dependents on their parent's tax return. This $500 is in addition to the $1,000 you already get for each exemption you claim.

The child you are claiming must be your son, daughter, stepson, or stepdaughter and must be under age 19 by the end of the year for which you claim the exemption. If the child is a full-time student, you can take the extra exemption if the child is under age 24 on December 31.

This is an exemption, not a credit, which means that you can deduct the $500 only if you have Indiana adjusted gross income against which to offset the $500.

There is no limit to the amount of $500 exemptions you may claim. If you have 12 children who are all your dependents, you get 12 of these $500 exemptions.

I have heard and read that a portion of the
registration fees Indiana residents pay for their vehicles is deductible and
reported on schedule A. Specifically, since the county excise tax we pay is
based on the vehicle's value, then it is deductible. A friend of mine said that
she was told by a CPA and a representative at the Internal Revenue Service that
none of the fees paid are deductible. Please clear this up for us.

W.W., Indianapolis

You are correct that a portion of the vehicle registration fee in Indiana qualifies as an itemized deduction on your Schedule A. The rule for deducting part of fee is that the deductible portion is the part that is based on the value of your vehicle, and the fee must be one that is charged on a yearly basis (which, in Indiana, it is).

I'm not sure why the friendly IRS representative said that none of the registration fees are deductible, but I would guess that there was a misunderstanding in the conversation, because this is by no means an obscure rule. Some states don't charge an excise tax when you renew your license plates, so maybe the IRS person thought she was speaking with someone from a state that doesn't have this fee.

In order to claim your deduction, don't just flip through your checkbook searching for the amount you paid the Bureau of Motor Vehicles. That amount will include more than the deductible excise tax. Instead, get your actual auto registration form (it's probably in your glove compartment or your billfold) and find the excise tax portion of your registration fee on that form. The deductible amount will be in a box labeled "County Tax Due."

Place the county tax amount on line 7 (Personal property taxes) in the Taxes You Paid section of your Schedule A. You must have enough other deductions to qualify to use Schedule A, otherwise this deduction will do you no good.

I got nailed last week with a parking ticket for
parking at an expired meter. This parking ticket money goes to our local
government just like income taxes, so can I take a deduction for the ticket as a
tax expense?

I.F., Indianapolis

Your argument makes sense to me, but I'm afraid it won't fly with the IRS. You can't take a deduction for the fine you pay when you break the law, which is technically what you did when you parked at a meter without paying.

copyright © 2000 Gail Perry - Fun with Taxes


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