November 15, 1993
Taxpayers Overlook Key Details
of Tax Law Changes
WASHINGTON - Calls to the Internal Revenue Service show that
many taxpayers have questions about some key details of recent tax
For example, many taxpayers think that everyone's tax rates
have gone up. In face, the higher rates affect fewer than two
percent of taxpayers. The law created two higher tax rates for
1993, but did not change the income levels for the lower rates.
The new top rates apply for taxable incomes above:
Filing Status 36 Percent 39.6 Percent
Single $115,000 $250,000
Head of Household 127,500 250,000
Married, joint return 140,000 250,000
Married, separate returns 70,000 125,000
Taxable income is figured by subtracting deductions and
personal exemption amounts from your total income.
Some older Americans have expressed concern about new rules for
taxing social security benefits. Many senior citizens don't realize
that the change won't take place until 1994 and will impact only
about 3 million higher-income recipients. Generally, those affected
are persons with incomes, including one-half on their social
security benefits, over $34,000--over $44,000 of married filing
Some retailers eligible for luxury tax refunds are delaying the
processing of their checks by not following procedures for filing
claims. The new law repealed the luxury tax on boats, planes, furs
and jewelry retroactive to the beginning of 1993.
Many boat dealers and jewelers especially have omitted their
customers' taxpayer identification numbers with their claims. They
have also failed to attach an accounting of luxury taxes reported or
paid during 1993, refunds claimed, and the remaining tax eligible
for refund. Retailers preparing their own refund claims should get
the instructions for Form 720 for detailed information.
IRS assistors have received special training in the new tax law
changes and can help taxpayers who need information. Taxpayers
should call IRS toll-free at 1-800-829-1040.
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