Members of the Maryland Association of Certified Public...

Tax questions

February 06, 1997

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.

Q.I turned 65 late in 1996. Am I entitled to an over-65 exemption for the entire year?

A. Taxpayers no longer receive an over-65 exemption on their federal return. Instead, taxpayers who do not itemize received an additional amount added to the standard deduction; taxpayers who do itemize receive no extra benefit. However, Maryland does grant an over-65 exemption on the state tax return to a taxpayer who has reached 65 by the end of the tax year.

Q. Can I take the proceeds from some Saving Bonds I cashed in and roll it over into an existing annuity without incurring any tax liability?

A.Assuming the Savings Bonds were not held in an IRA or other tax deferred-type account, you will not be able to roll the proceeds tax free into an existing annuity. You must determine the amount of income received when you cashed in the Savings Bonds. This procedure depends on the type of bond, whether you purchased the bond or transferred from one type of bond to another. The income received from U.S Savings Bonds is taxable on your federal return and tax exempt on your state return.

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

To ask a tax question, call Sundial at (410) 783-1800. Call 268-7736 in Anne Arundel County, 836-5028 in Harford County and 848-0338 in Carroll County. Using a Touch-Tone phone, punch in the four-digit code 6225 after you hear the greeting.

Readers also can e-mail questions through The Sun's Website -- www.sunspot.net. Visitors to the Website will be able to access an archive of the questions and answers as well as other useful tax information and links.

Selected questions will be answered in the Business section. No questions will be answered by phone.

Pub Date: 2/06/97

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