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          1) Sometimes you can save money by not filing a joint
          return.  Several types of expenses (medical expenses,
          casualty losses, and miscellaneous expenses) are
          deductible only when they exceed a percentage of
          adjusted gross income.  If one spouse has a fairly high
          amount of expenses and a low adjusted gross income, it
          could make sense for the couple to file separate
          returns.  In addition, neither spouse can be claimed as
          a dependent on someone else's return if the couple
          files a joint return.  A family's taxes might be
          reduced if a couple with little income filed separately
          and allowed someone else, say their parents, to take
          the dependency deductions.  Also, a couple might
          jointly own income-producing property.  If that
          property is the only source of income for one spouse,
          taxes on that income could be reduced or eliminated by
          filing separate returns.  Finally pre-divorce alimony
          payments (such as those required by a separation
          agreement) cannot be deducted if the couple is still
          married and files a joint return.  Separated spouses
          might want to file separate returns so the spouse
          paying alimony can deduct the payments.  
          
          2)  For married taxpayers filing separately, the
          personal exemption phaseout begins at adjusted gross
          income of $83,850 and ends at $145,100 in 1994.  For
          married couples filing jointly, the phaseout begins at
          AGI of $167,700 and ends at $290,200 in 1994.  The
          result is that if married taxpayers are subject to the
          phaseout on a joint return but do not have equal
          incomes, they can avoid the phaseout by filing separate
          returns.  To benefit, the lower-earning spouse must
          have AGI of less than $83,850 and be able to claim the
          dependency exemptions for the children as well as his
          or her own personal exemption.  This means that spouse
          must separately provide over half the support during
          the year.  To ensure there is proof, we advise separate
          bank accounts to pay for support items.  See IRS
          Publication 17 for a list of the expenses that are
          considered support items.  When the marital home is
          jointly owned, each spouse is considered to contribute
          half of the cost regardless of the actual
          contributions.  Separate filing might backfire,
          however, for some married taxpayers with a large amount
          of itemized deductions.  That's because the itemized
          deduction reduction for married couples filing
          separately begins with an AGI of only $53,900 in 1994. 
          Because of this lower threshold, some couples will find
          that the higher-income spouse will lose more itemized
          deductions by filing separately than they would have
          lost on a joint return, and this loss will reduce or
          eliminate the tax benefit of saving the dependent
          exemptions.
          Using the long form can pay off even if you don't
          itemize deductions.  Some deductions are known as
          adjustments to income or above-the-line deductions. 
          These are available whether or not you itemize
          expenses.  But they are not listed on the 1040A short
          form.  The long form lists additional adjustments you
          might be entitled to such as Keogh plan contributions,
          penalties paid on early withdrawals of savings, alimony
          payments and the disability income exclusion.  The long
          form also lists tax credits that are not mentioned on
          Form 1040A.
          
          3) Tax return due on April 15 and you're not ready to
          file?  One way to extend the filing deadline is to file
          for an automatic extension with Form 4868.  Another way
          is to be residing outside the United States on April
          15.  If you are residing outside the United States you
          get an automatic extension of your filing deadline to
          June 15.  But you must be residing outside the United
          States on April 15.  It used to be that you could
          qualify for this extension if you were simply traveling
          outside the U.S. on April 15.  That is no longer good
          enough.  Another way to get an extension if you are
          living outside the United States is to file Form 2350
          before the due date for your return.  This can be used
          if you anticipate owing no tax on your foreign income. 
          This usually is used because you expect to meet the
          requirements for using the foreign earned income
          exclusion sometime after the return is due.
          
          4) Can't pay?  File anyway.  If you have money due on
          your tax return and can't pay your taxes, you should
          still file your tax return on time.  This alone will
          avoid the failure-to-file penalty and save you some
          money.  Send as much money as you can with the tax
          return and attach Form 9465, Installment Agreement
          Request, to the front of the tax return.  On Form 9465,
          give the amounts you can pay and the dates you can pay
          them.  The IRS will usually allow you to follow the
          installments requested or will work out other options
          with you.  One of the worst things to do is not filing
          a tax return at all.  That can add a lot more to the
          taxes already owed.  To get copies of Form 9465, visit
          your local IRS office or call 1-800-829-3676.
          
          5) Married couples with taxable income under $50,000
          and without dependents can now use the easiest tax form
          -- Form 1040EZ.  In the past, only single persons could
          use this easier, green, 10-line form.  Other
          requirements that also apply: you (and your spouse if
          filing jointly) were not age 65 or older or blind; all
          income is only from wages, salaries, tips, taxable
          scholarships and fellowship grants, and taxable
          interest income of $400 or less; no advance earned
          income credits were received in 1993; no itemized
          deductions, adjustments to income, or tax credits can
          be be taken and no other taxes are owed, other than the
          amount from the tax table.
          
          
          
