European Stars And Stripes (Newspaper) - March 6, 1989, Darmstadt, Hesse                                Education funds avoiding the tax bite on College savings by United press International tax Law is being changed to make in harder to write of your student children but easier to save for their educations in the waning hours of the 1 doth Congress the technical and miscellaneous Revenue act of 1988 was passed nearly unanimously after Days of rancorous. Debate " the final agreement worked out in a House an Senate conference committee makes technical corrections to both the tax Reform act of 1986 and the 1987 Revenue act. Two of the provisions of the act ailed parents whore putting their children through College. Under present Taw parents May claim a dependency exemption $1,950 in 1968 for a full Lime student. Regardless of ago in the student otherwise meets dependency requirements. The act provides that beginning this year the dependency exemption May not be claimed for a student Over 23, unless the dependent s Gross income Tor the year is less than the exemption amount which is $2,000 in 1989 and indexed hereafter. If the Parent cannot claim the exemption the child May claim an exempt on on his or her own return. Thai is a Revenue Raiser Lor the government said Pam Pecarich a partner for lax policy at Coopers and Lybrand. A National firm of certified Public accountants. The act also provides that families can use . Series be savings Bonds As a tax free Means of saving for educational expenses. Wrren the Bonds Are cashed the acc mute led interest will be tax free in the entire proceeds Are used to pay Lilion or tees at eligible institutions for the owner of the. Bond or his or her spouse or dependents however Pecarich warned the plan has a number of restrictions that i am concerned will trap  the Bonds must be issued alter dec 31,1989, must a purchased by. Parents 24 years or older and cannot be placed in the name of a child or another dependent or Puich Asod by grandparents. Old Bonds cannot be converted into the new program. The tax tree provision is phased out where modified adjusted grass income is in the $60,000-$90,000 Range on joint returns or �40.000-$50,000 for those filing singly. These amounts will be indexed beginning in 1990,. A two earner couple will ind themselves running up against that pretty quickly Pecarich said. The proceeds cannot be used to pay tuition at prop Letory schools which Are Tor profit institutions such As hair dressing and computer schools and cannot be used to pay for room and Board. Pecarich suggested alternatives to the series be Bonds could be regular tax free state and municipal Bonds which have no restrictions on ultimate use or for higher income parents Zero Coupon Bonds offered by most brokerage companies. V the Zero Coupon Bonds that offer wide latitude in Lime to maturity yield and investment rate Are usually based in Long term government securities which Are very Safe Pecarich said. It s vary Good said Pecarich who bought Zero Coupon Bonds to pay or her own son s education you invest $10,000 when he s 10. And by the time he s 18 you Hava enough Lor the first two  Steve Woolf a tax manager for Coopers and Lybrand said the concept is really the same with the yes the government is responding to the private sector and the advantage is that you Don t pay lax on lha buildup work said. For couples who know they Are not going to qualify a careful Survey of the various returns Between the two kinds of Bonds at the time of Purchase is recommended it s the principal and interest together they should look Al not just the yield warned Woolf. Pecarich said she thought there was somewhat greater uncertainty with the be Bonds where the interest rate is averaged Over the life of the Bond and then paid at hat a e at maturity or whenever it is cashed. 1 those Are things that people Don t like when they Are trying to lock in a secure educational future Tor their children she said. Is tax facts Standard deductions filing Statua single married tiling jointly married filing separately head of household Standard deduction �3,000 $5,000 $2,500 $4.400 average Dollar Exchange rates for 1988 austrian Schilling 12.3477 belgian franc 36.7683 French franc 5.9569 German Mark 1 .75623 dutch Guilder ,97658 Swiss franc 1 .4633 italian lira 1301.63 Spanish peseta 116.487 Pound Sterling 0.547254 if you had income last year in one or More of the above currencies use the applicable rate for converting your earnings to dollars irs requires All income on your return to be stated in dollars Simm ibs and finally Check and double Check by the stars and stripes if you re expecting a lax refund this year keep in mind lha an error free return will Speed internal Revenue service processing Lime. Once your return is Complete the irs suggests give it a final once Over paying careful attention to the following obvious but alien the most troublesome areas. Are All w 2 forms the wage and tax statements attached. Have you attached All necessary supporting schedules to your form 1040? to your name and social Security number on each schedule. Are the names and social Security numbers 61 All dependents aged 5 and above on your return v is your aril Unetic Correct. Are All entries writ Len in of the proper lines if you rounded off numbers did you round Oft consistently is your handwriting legible when you used the irs lax tables did you follow the Tine across to the Correct column Lor your filing status did you sign and Dale your return remember if i s a joint return your spouse also must sign a. Did you use the Peel of Label and is the information on the Label Correct if not have you made the necessary corrections 16 the Label?.,- did you make a copy of your return Lor your records did you put the Correct postage Art the pre addressed envelope if the return has. Several . Additional postage May be required. Asap. It Jroud Wal help doing or lanes Call or risk yer Tell iks office asap and nuke your taxes k is  your taxes less taxing Dothe asap 14 is tax & financial planning guide