Tax returns up an average $100 this year

March 09, 1998|By KERRY LYNN FRALEY

Tax returns up an average $100 this year

The average federal tax refund check will be about $100 higher than last year, in large part due to two changes in the tax law, according to an Internal Revenue Service official.

Both the personal exemption and standard deduction were increased for 1997, which benefits most taxpayers who don't itemize on their federal income tax returns, said Domenic LaPonzina, chief of communications for the Delaware-Maryland district office.

The personal exemption was raised by $100 to $2,650 for 1997.

The standard deduction went up for most filing categories. The deduction is $4,150 for single taxpayers, $6,050 for heads of household, $6,900 for married people filing jointly and $3,450 for married people filing separately.


The deduction didn't change for single and married people age 65 or older or blind or for those eligible to be claimed on someone else's return.

The amount of money one could make before having to file a tax return also went up for 1997.

The income limit depends on filing status. New limits are $6,800 for single taxpayers, $8,700 for heads of household, $12,200 for married taxpayers filing jointly, $2,650 for married people filing separately and $9,250 for qualifying widows and widowers.

Working lower-income people with children can get a higher tax credit for 1997, LaPonzina said.

The maximum Earned Income Tax Credit went up $100 to $3,656. The amount of money one can earn and still be eligible also went up.

Other changes affecting federal tax filings include:

* Some capital gains are being taxed at a reduced rate thanks to the Taxpayers Relief Act of 1997.

* People of any age can now exclude up to $250,000 gain on the sale of their home after May 6, 1997, as long as they lived in the home for at least two of the five years before the sale. They can do that every two years.

* Taxpayers who received accelerated death benefits under a life insurance contract because they were terminally or chronically ill can exclude those benefits from their income.

* Amounts from qualified long-term care insurance contracts can usually be excluded from income as well. Insurance premiums are deductible as a medical expense up to certain limits, depending on the taxpayer's age.

* A taxpayer may be able to claim as high as a $6,000 tax credit for qualifying adoption expenses.

* The health insurance deduction for self-employed people rose to 40 percent.

* The standard business mileage rate increased to 31.5 cents.

* A married couple filing a joint return can contribute up to $2,000 to each of their Individual Retirement Accounts even if one spouse had little or no income.

Tips for taxpayers

The IRS has extended its hours for telephone assistance this year.

Taxpayers can call 1-800-829-1040 between 7 a.m. and 11 p.m. Monday through Saturday.

The Hagerstown IRS office, at 1260 Maryland Ave., is open from 8:30 a.m. to 3:30 p.m. weekdays. Preparation help is available on Tuesdays and Wednesdays.

Forms and publications can be downloaded from the World Wide Web at (

Help for Maryland taxpayers is available by telephone at 1-800-638-2937, on the World Wide Web at ( or in person at 1 S. Potomac St., Hagerstown.

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