2005 What’s Different This Year
Tax laws change annually without fail, but 2005 was an unusual year. These additions, deletions, and modifications are directly related to the year’s news. 

Thank high gasoline prices for a couple of new or increased deductions. You can write off 48.5 cents a mile for business-related driving from September 1 to year’s end (but 40.5 cents for pre-September miles). If you use biodiesel in your business vehicle, you can deduct 50 cents a gallon.

Katrina relief yields tax deductions for victims — and for helpers. Katrina victims can claim property loss of up to 100 percent of their gross income (it’s usually 50 percent) and can use 2004 income to calculate the Earned Income Credit. Tax penalties for IRA withdrawals, as well as for all other eligible retirement plans, are waived for the hurricane victims.

Any charitable types who provided rent-free housing to Katrina victims can claim $500 per person, up to $2,000 total. And contributors can claim up to 50 percent of their adjusted gross income in charitable giving if donations were made between August 28 and year’s end — to any charity, not just to hurricane-related relief.