1999 Tax Help Archives  
Publication 553 1999 Tax Year

Publication 553:
Highlights of 1999 Tax Changes

This is archived information that pertains only to the 1999 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

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.

1. Tax Changes for Individuals
          Standard Deduction Amount Increased
          Exemption Amount Increased
          Limit on Itemized Deductions Increased
          Reporting Capital Gain Distributions
          Child Tax Credit Increased 
          Earned Income Credit
          Employee Business Expenses
          Health Insurance Deduction for the Self-Employed
          Self-Employment Tax 
          Stop-Smoking Programs
          Depreciating Property Used in a Rental Activity
          Limit on Personal Credits
          Depreciation Recovery Period
          Gains from Certain Constructive Ownership Transactions
          Installment Method of Accounting
          Tax Payment by Credit Card
          Interest Netting
          Interest Rate on Overpayments
          Refund Offset Against Debt
          Preparer Identification Number
2. Tax Changes for Businesses
          Standard Mileage Rate
          Production Flexibility Contract Payments
          Business Use of Your Home
          Depreciation and Section 179 Deduction
          Marginal Production of Oil and Gas
          Health Insurance Deduction for the Self-Employed
          Self-Employment Tax
          General Business Credit
          Depreciation Recovery Period for Alternative Minimum Tax (AMT)
          Gains from Certain Constructive Ownership Transactions
          Additions to Definition of Noncapital Assets
          Installment Method of Accounting
          Electronic Deposits of Taxes
          Electronic Filing Delayed for Certain Partnerships
          Preparer Identification Number
          OID List Now Available From IRS Website
3. IRAs and Other Retirement Plans
          Distributions Due to an IRS Levy
          Hardship Distributions
          Discrimination Safe Harbor
4. Gift and Estate Taxes
5. Excise Taxes
          Disclosure Rules
6. Exempt Organizations
          Foreign Earned Income Exclusion
7. Foreign Issues
          Award of Administrative Costs
          Notice of IRS Contact of Third Parties
          Last Date for Filing Tax Court Petition
          Explanation of Claim for Refund Disallowance
8. Taxpayer Rights
          Help With Unresolved Tax Problems


This publication highlights tax law changes that take effect in 1999 and 2000. Each chapter is divided into separate sections for each year.

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 self-employed.
  • Postponement of tax deadlines because of Y2K failures.
  • Repeal of the installment method for most accrual method taxpayers.

See the later discussion of each topic for more information.

Adjusting your withholding or estimated tax payments for 2000. 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.

To adjust your.... Get form... And publication...
Withholding W-4, Employee's Withholding Allowance Certificate 919, Is My Withholding Correct for 1999?
Estimated tax payments 1040-ES, Estimated Tax for Individuals 505, Tax Withholding and Estimated Tax

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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