Line 38a

If you were born before January 2, 1940, or were blind at the end of 2004, check the appropriate box(es) on line 38a. If you were married and checked the box on Form 1040, line 6b, and your spouse was born before January 2, 1940, or was blind at the end of 2004, also check the appropriate box(es) for your spouse. Be sure to enter the total number of boxes checked.

Blindness

If you were partially blind as of December 31, 2004, you must get a statement certified by your eye doctor or registered optometrist that:

• You cannot see better than 20/200 in your better eye with glasses or contact lenses, or
• Your field of vision is 20 degrees or less.

If your eye condition is not likely to improve beyond the conditions listed

above, you can get a statement certified by your eye doctor or registered optometrist to this effect instead.

You must keep the statement for your records.

Line 38b

If your spouse itemizes deductions on a separate return or if you were a dual-status alien, check the box on line 38b. But if you were a dual-status alien and you file a joint return with your spouse who was a U.S. citizen or resident at the end of 2004 and you and your spouse agree to be taxed on your combined worldwide income, do not check the box.

Line 39 - Itemized Deductions or Standard Deduction

In most cases, your federal income tax will be less if you take the larger of your itemized deductions or standard deduction.

If you checked the box on line 38b, your standard deduction is zero.

If you checked the box on line 36b, your standard deduction is zero.

Itemized Deductions

To figure your itemized deductions, fill in Schedule A.

Standard Deduction

Most people can find their standard deduction by looking at the amounts listed under “All others’ to the left of Form 1040, line 39. But if you, or your spouse if filing jointly, can be claimed as a dependent on someone´s 2004 return or you checked any box on line 38a, use the worksheet or the chart on page 32, whichever applies, to figure your standard deduction. Also, if you checked the box on line 38b, your standard deduction is zero, even if you were born before January 2, 1940, or were blind.

Electing To Itemize for State Tax or Other Purposes

If you itemize even though your itemized deductions are less than your standard deduction, enter “IE’ on the dotted line next to line 39.

• Standard Deduction Chart for People Age 65 or Older or Blind--Line 37
• Standard Deduction Worksheet for Dependents--Line 37
• Deduction for Exemptions Worksheet--Line 39

Line 43 - Tax

Do you want the IRS to figure your tax for you?

 Yes. See Pub. 967 for details, in-cluding who is eligible and what to do. If you have paid too much, we will send you a refund. If you did not pay enough, we will send you a bill.

 No. Use one of the following methused ods to figure your tax. Also include in the total on line 43 any of the following taxes.

1. Tax from Forms 8814 and 4972. Be sure to check the appropriate box(es).
2. Tax from recapture of an education credit. You may owe this tax if (a) you claimed an education credit in an earlier year, and (b) you, your spouse if filing jointly, or your dependent received in 2004 either tax-free educational assistance or a refund of qualified expenses. See Form 8863 for more details. If you owe this tax, enter the amount and "ECR" on the dotted line next to line 43.

Tax Table or Tax Computation Worksheet. If your taxable income is less than $100,000, you must use the Tax Table that begins on page 60 to figure your tax. Be sure you use the correct column. If your taxable income is $100,000 or more, use the Tax Computation Worksheet on page 72.

However, do not use the Tax Table or Tax Computation Worksheet to figure your tax if any of the following apply.

Form 8615. Forms 8615 must generally be used to figure the tax for any child who was under age 14 at the end of 2004, and who had more than $1,600 of investment income, such as taxable interest, ordinary dividends, or capital gains (including capital gain distributions). But if neither of the child´s parents was alive at the end of 2004, do not use Form 8615 to figure the child´s tax. Also, a child born on January 1, 1991, is considered to be age 14 at the end of 2004. Do not use Form 8615 for such a child.

Schedule D Tax Worksheet. If you have to file Schedule D and Schedule D, line 18 or 19, is more than zero, use the Schedule D Tax Worksheet on page D-9 of the Instructions for Schedule D to figure your tax.

Qualified Dividends and Capital Gain Tax Worksheet. If you do not have to use the Schedule D Tax Worksheet (see above), use the worksheet on page 34 to figure your tax if any of the following apply.

• You reported qualified dividends on Form 1040, line 9b.
• You do not have to file Schedule D and you reported capital gain distributions on Form 1040, line 13.
• You are filing Schedule D and Schedule D, lines 15 and 16, are both more than zero.

Schedule J. If you had income from farming or fishing, your tax may be less if you choose to figure it using income averaging on Schedule J.

Line 44 - Alternative Minimum Tax

Use the worksheet below to see if you should fill in Form 6251.

Exception. Fill in Form 6251 instead of using the worksheet below if you claimed or received any of the following items.

• Accelerated depreciation.
• Stock by exercising an incentive stock option and you did not dispose of the stock in the same year.
• Tax-exempt interest from private activity bonds.
• Intangible drilling, circulation, research, experimental, or mining costs.
• Amortization of pollution-control facilities or depletion.
• Income or (loss) from tax-shelter farm activities or passive activities.
• Income from long-term contracts not figured using the percentage-of-completion method.
• Interest paid on a home mortgage not used to buy, build, or substantially improve your home.
• Investment interest expense reported on Form 4952.
• Net operating loss deduction.
• Alternative minimum tax adjustments from an estate, trust, electing large partnership, or cooperative.
• Section 1202 exclusion.
• A general business credit.

Form 6251 should be filled in for a child who was under age 14 at the end of 2004 if the child´s adjusted gross income from Form 1040, line 37, exceeds the child´s earned income by more than $5,750.

• Worksheet to See if You Should Fill in Form 6251 - Line 43

Line 46 - Foreign Tax Credit

If you paid income tax to a foreign country, you may be able to take this credit. Generally, you must complete and attach Form 1116 to do so.

Exception. You do not have to complete Form 1116 to take this credit if all five of the following apply.

1. All of your gross foreign source inbility come was from interest and dividends and all of that income and the foreign tax paid on it were reported to you on Form 1099-INT or Form 1099-DIV, or Schedule K-1 (or substitute statement).
2. If you had dividend income from shares of stock, you held those shares for at least 16 days.
3. You are not filing Form 4563 or excluding income from sources within Puerto Rico.
4. The total of your foreign taxes was not more than $300 (not more than $600 if married filing jointly).
5. All of your foreign taxes were:
1. a. Legally owed and not eligible for a refund, and
2. b. Paid to countries that are recognized by the United States and do not support terrorism.

For more details on these requirements, see the Instructions for Form 1116. Do you meet all five requirements above?

 Yes. Enter on line 46 the smaller of (a) your total foreign taxes, or (b) the amount on Form 1040, line 43.

 No. See Form 1116 to find out if you can take the credit and, if you can, if you have to file Form 1116.

Line 47 - Credit for Child and Dependent Care Expenses

You may be able to take this credit if you paid someone to care for your child under age 13 or your dependent or spouse who could not care for himself or herself. For details, use TeleTax topic 602 (see page 8) or see Form 2441.

Line 48 - Credit for the Elderly or the Disabled

You may be able to take this credit if by the end of 2004 (a) you were age 65 or older, or (b) you retired on permanent and total disability and you had taxable disability income. But you usually cannot take the credit if the amount on Form 1040, line 37, is $17,500 or more ($20,000 or more if married filing jointly and only one spouse is eligible for the credit; $25,000 or more if married filing jointly and both spouses are eligible; $12,500 or more if married filing separately). See Schedule R and its instructions for details.

Credit Figured by the IRS. If you can take this credit and you want us to figure it for you, see the Instructions for Schedule R.

Line 49 - Education Credits

If you (or your dependent) paid qualified expenses in 2004 for yourself, your spouse, or your dependent to enroll in or attend an eligible educational institution, you may be able to take an education credit. See Form 8863 for details. However, you cannot take an education credit if any of the following apply.

• You are claimed as a dependent on someone’s (such as your parent’s) 2004 tax return.
• Your filing status is married filing separately.
• The amount on Form 1040, line 37, is $52,000 or more ($105,000 or more if married filing jointly).
• You are taking a deduction for tuition and fees on Form 1040, line 27, for the same student.
• You (or your spouse) were a nonresiage dent alien for any part of 2004 unless your filing status is married filing jointly.

Line 50 - Retirement Savings Contributions Credit

You may be able to take this credit if you, or your spouse if filing jointly, made (a) contributions to a traditional or Roth IRA; (b) elective deferrals to a 401(k), 403(b), governmental 457, SEP, or SIMPLE plan; (c) voluntary employee contributions to a qualified retirement plan (including the federal Thrift Savings Plan); or (d) contributions to a 501(c)(18)(D) plan.

However, you cannot take the credit if either of the following applies.

1. The amount on Form 1040, line 37, is more than $25,000 ($37,500 if head of household; $50,000 if married filing jointly).
2. The person(s) who made the qualified contribution or elective deferral (a) was born after January 1, 1987, (b) is claimed as a dependent on someone else’s 2004 tax return, or (c) was a student (defined below).

You were a student if during any 5 months of 2004 you:

• Were enrolled as a full-time student at a school, or
• Took a full-time, on-farm training course given by a school or a state, county, or local government agency.

A school includes a technical, trade, or mechanical school. It does not include an on-the-job training course, correspondence school, or night school.

For more details, use TeleTax topic 610 (see page 8) or see Form 8880.

Line 51 - Child Tax Credit

What is the Child Tax Credit?

This credit is for people who have a qualifying child (defined below). It is in addition to the credit for child and dependent care expenses on Form 1040, line 47, and the earned income credit on Form 1040, Line 65a.

Three Steps To Take the Child Tax Credit!

Step 1. Make sure you have a qualifying child for the child tax credit (defined below).

Step 2. Make sure you checked the box on Form 1040, line 6c, column (4), for each qualifying child.

Step 3. Answer the questions on this page to see if you may use the worksheet on page 38 to figure your credit or if you must use a href="/IRS-Forms/2004/p972.pdf">Pub. 972, Child Tax Credit. If you need Pub. 972, see page 7.

Qualifying Child for Child Tax Credit

A qualifying child for purposes of the child tax credit is a child who:

• Is claimed as your dependent on line 6c,
• Was under age 17 at the end of 2004,
• Is your (a) son, daughter, adopted child, stepchild, or a descendant of any of them (for example, your grandchild); (b) brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew), whom you cared for as you would your own child; or (c) foster child (any child placed with you by an authorized placement agency whom you cared for as you would your own child), and
• Is a U.S. citizen or resident alien. The above requirements are not the same as the requireto ments to be a qualifying child for the earned income credit.

An adopted child is always treated as your own child.

An adopted child includes a child placed with you by an authorized placement agency for legal adoption even if the adoption is not final. An authorized placement agency includes any person or court authorized by state law to place children for legal adoption.

Line 52 - Adoption Credit

You may be able to take this credit if either of the following applies.

• You paid expenses to adopt a child.
• You adopted a child with special needs and the adoption became final in 2004.

See the Instructions for Form 8839 for details.

Line 53

Include the following credits on line 53 and check the appropriate box(es). To find out if you can take the credit, see the form indicated.

• Mortgage interest credit. If a state or local government gave you a mortgage credit certificate, see Form 8396.
• District of Columbia first-time homebuyer credit. See Form 8859.

Line 54 - Other Credits

Include the following credits on line 54 and check the appropriate box(es). If box c is checked, also enter the form number, if applicable. To find out if you can take the credit, see the form or publication indicated.

• Credit for prior year minimum tax. If you paid alternative minimum tax in a prior year, see Form 8801.
• Qualified electric vehicle credit. If you placed a new electric vehicle in service in 2004, see Form 8834.
• General business credit. This credit consists of a number of credits that usually apply only to individuals who are partners, shareholders in an S corporation, self-employed, or who have rental property. See Form 3800 or Pub. 334.
• Empowerment zone and renewal community employment credit. See Form 8884.
• New York Liberty Zone business employee credit. See Form 8834.
• Nonconventional source fuel credit. If you sold fuel produced from a nonconventional source, or you were an owner of roylty interests and you received income from the sale of fuel produced from a nonconventional source, you may be able to take this credit. See Internal Revenue Code section 29 and, if an owner of royalty interests, Rev. Proc. 2004-27, 2004-17 I.R.B. 831. You can find Rev. Proc. 2004-27 on page 831 of Internal Revenue Bulletin 2004-17 at www.irs.gov/pub/irs-irbs/irb04-17.pdf. Attach a schedule showing how you figured the credit. Check box c and enter "FNS" on the line to the right of box c.
• Qualified zone academy bond credit. This credit applies only to S corporation shareholders. See Form 8860.

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