Tax practitioners preparing 2004 client business and self-employed returns are confronted with a bewildering maze of tax law changes, which in some cases can lead to mistakes.Significant changes affecting 2004 returns include multiple changes to depreciation and expensing, with new limits for sport utility vehicles, passenger automobiles, trucks and vans; bonus depreciation for qualified leasehold property; and newly redesigned Schedule K-1s for partnerships and S corporations.

"The American Jobs Creation Act had so many things in it," said Cindy Hockenberry, tax information analyst at the Appleton, Wis.-based National Association of Tax Professionals. "The expensing limit for SUVs is a really big thing," she said. "It dropped from $102,000 to $25,000. Some people think the new limit doesn't apply until 2005, but it applies to any purchases made on or after Oct. 22, 2004. The $102,000 limit still applies for SUVs placed in service before then, so long as they meet the over-50 percent business use test."

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