Federal and state booklets hitting the streets this week

THE TAX MAN COMETH

December 31, 1992|By Michael Dresser | Michael Dresser,Staff Writer

They're back.

Some 1.9 million federal income tax return booklets, on the heels of a like number of Maryland tax booklets, are being mailed out to Marylanders beginning this week, federal and state officials said at a news conference in Baltimore yesterday.

Taxpayers will find few noticeable changes in their federal tax forms, said Domenic J. LaPonzina, a spokesman for the Internal Revenue Service's Baltimore district. Because Congress has largely kept its hands off the tax code lately, the forms are about the same as those we have come to know and love over the past five years.

But Maryland's tax forms will have a distinctly different, more simplified look, said state Comptroller Louis L. Goldstein. Gone will be the old Column A and Column B format for listing working couples' incomes. The "combined filing separate" method has been eliminated, replaced by a single column for total income.

Along with the new look will come a new tax bite for people who count their taxable income in six digits. Under legislation adopted by the General Assembly last spring to cope with Maryland's budget crisis, individuals with more than $100,000 and couples with more than $150,000 in taxable income will be subject to a 6 percent tax on any income above those amounts.

That increase from the 5 percent rate is expected to affect 30,000 taxpayers and raise $50 million for the state's ailing treasury.

Residents of Baltimore County, together with Allegany and Montgomery County taxpayers, face an additional hit as the "piggyback" county tax of 50 percent (as a percentage of state income tax) rises to 55 percent. It could be worse. Prince George's and Talbot County residents will have to ante up 60 percent. In other Maryland jurisdictions, the piggyback rate is unchanged.

Mr. Goldstein also said the 1992 state form will include a new, simplified chart for calculating the standard deduction. Last year, he said, more than 27,000 filings contained errors in calculating that figure.

The elimination of the combined-separate return will wipe out a $90 benefit enjoyed by two-income couples in past years. But that loss will be largely offset by a new rule allowing the lower-paid spouse to deduct up to $1,200 from his or her income, said George H. Spriggs, director of the state Income Tax Division. That subtraction will apply only to wages, not to other sources of income.

Mr. LaPonzina of the IRS made a pitch for individuals who have not filed tax returns in recent years to "get right with their 'N government" on their tax obligations.

"If they come forward to us voluntarily, they will not be subject to criminal prosecution," he said.

Although there are few basic changes in the federal form, some of the dollar amounts have changed from last year. The personal exemption is up to $2,300, from $2,150; the maximum earned income credit has risen to $2,211, from $2,020.

Standard deductions have risen by amounts ranging from $150 to $250. Mr. LaPonzina said about three-quarters of federal taxpayers will benefit from taking standard deductions rather than itemizing.

About 200,000 federal taxpayers will receive only a postcard with an IRS mailing label to attach to the return.

Individuals who receive postcards but want the booklets should call the IRS office at 962-2590 in Baltimore or 1-800-829-1040 elsewhere in the state and in the District of Columbia.

The Maryland comptroller's office offers toll-free tax assistance at 1-800-MD-TAXES or 1-800-638-2937.

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