Publication 553 - Highlights Of 2003 Tax Changes - Department Of The Treasury Page 13
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$10,710 if acquired after May 5, 2003, and you claim
social security (old-age, survivors, and disability insur-
the 50% or 30% special allowance; or
ance) and 2.9% for Medicare (hospital insurance).
•
The maximum amount subject to the social security part
$3,060 if you elect not to claim any special allow-
for tax years beginning in 2003 increased to $87,000. All
ance for the vehicle, the vehicle is not qualified prop-
net earnings of at least $400 are subject to the Medicare
erty, or the vehicle is qualified Liberty Zone property.
part.
The limits are reduced if the business use of the
!
vehicle is less than 100%.
2004 Changes
CAUTION
Standard Mileage Rate
Depreciation limits on trucks or vans. The total depre-
ciation deduction (including the section 179 deduction and
the special depreciation allowance) you can take for a
Business-related mileage. For 2004, the standard mile-
truck or van (such as a minivan or a sport utility vehicle)
age rate for the cost of operating your car, van, pickup, or
built on a truck chassis that you use in your business and
panel truck increases from 36 cents a mile to 37
1
/
cents a
2
first place in service in 2003 is:
mile for all business miles.
•
Car expenses and use of the standard mileage rate are
$7,960 if acquired before May 6, 2003, and you
explained in chapter 4 of Publication 463, Travel, Enter-
claim the 30% special allowance;
tainment, Gift, and Car Expenses.
•
$11,010 if acquired after May 5, 2003, and you claim
the 50% or 30% special allowance; or
Meal Expenses When Subject
•
$3,360 if you elect not to claim any special allow-
to “Hours of Service” Limits
ance for the vehicle, the vehicle is not qualified prop-
erty, or the vehicle is qualified Liberty Zone property.
Generally, you can deduct only 50% of your business-re-
lated meal expenses while traveling away from your tax
home for business purposes. Also, you can generally de-
The limits are reduced if the business use of the
!
duct only 50% of certain reimbursements you make to your
vehicle is less than 100%.
employees for meal expenses they incur while traveling
CAUTION
away from home on business. You can deduct a higher
percentage if the meals take place during or incident to any
period subject to the Department of Transportation’s
Depreciation limits on electric vehicles. The total de-
“hours of service” limits. (These limits apply to workers who
preciation deduction (including the section 179 deduction
are under certain federal regulations.) The percentage
and the special depreciation allowance) you can take for
increases to 70% for 2004. Business meal expenses are
an electric vehicle that you use in your business and first
covered in chapter 1 of Publication 463, Travel, Entertain-
place in service in 2003 is:
ment, Gift, and Car Expenses. Reimbursements for em-
•
$22,880 if acquired before May 6, 2003, and you
ployee meal expenses are covered in chapter 13 of
claim the 30% special allowance;
Publication 535, Business Expenses.
•
$32,030 if acquired after May 5, 2003, and you claim
the 50% or 30% special allowance; or
Electric and Clean-Fuel Vehicles
•
$9,080 if you elect not to claim any special allow-
For vehicles placed in service in 2004, the maximum
ance for the vehicle, the vehicle is not qualified prop-
clean-fuel vehicle deduction and qualified electric vehicle
erty, or the vehicle is qualified Liberty Zone property.
credit are scheduled to be reduced by 25%, as compared
to 2003.
The limits are reduced if the business use of the
At the time this publication was issued, Congress
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vehicle is less than 100%.
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was considering legislation that would repeal the
CAUTION
reduction for 2004. See What’s Hot in Tax
CAUTION
Forms, Pubs, and Other Tax Products at
formspubs/index.html to find out if this legislation was
More information. For more information on these limits,
enacted.
see Maximum Depreciation Deduction in chapter 5 of Pub-
lication 946.
Environmental Cleanup
(Remediation) Costs
Self-Employment Tax
Beginning in 2004, environmental cleanup (remediation)
The self-employment tax rate on net earnings remains the
same for 2003. This rate, 15.3%, is a total of 12.4% for
costs must be capitalized. You cannot choose to deduct
Chapter 2 Tax Changes for Businesses
Page 13
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