Tax man stirring, grab your wallet

Changes: They include a cut in Maryland's top income tax rate and an increase in the personal exemption.

Government

January 05, 2000|By Eileen Ambrose | Eileen Ambrose,SUN STAFF

For the past year, Marylanders prepared for the Y2K computer bug, not knowing whether it would appear. Now they are being asked to get ready for something that's a sure thing: taxes.

Taxpayers have begun receiving their tax booklets. This year, federal and state tax officials promise, filing your taxes will be easier.

And it will also be quicker for those who file their state taxes electronically and have their refunds directly deposited in their bank accounts, said William Donald Schaefer, state comptroller. Those who do this will receive their state tax refunds within 48 hours after their return is processed, he said.

During a joint news conference yesterday, state and federal tax officials outlined some of the changes in this year's forms.

Among the changes in store for Maryland taxpayers:

Maryland's top income tax rate for 1999 has been cut to 4.85 percent, down from 4.875 percent the year before.

The new rate, which applies to incomes of more than $3,000 after deductions, will affect the majority of Maryland taxpayers, state officials said. "It doesn't seem like it's much, but it does add more pay to your envelope and that's important because the economy is good and we want to continue to have a good economy," Schaefer said.

The top rate will be reduced again to 4.80 percent for 2001.

The personal exemption has been raised $100 to $1,850.

After last year's complicated tax form that left taxpayers frustrated, the state has returned to a simpler form and revived the popular short form 503, Schaefer said. About half a million residents are expected to file the short form.

To protect confidentiality, taxpayers must write their Social Security numbers on their returns themselves rather than have the number pre-printed for them on a label.

No more paper when you file electronically from a personal computer. Taxpayers will use a personal identification number for their signature rather than having to submit a signature form.

Taxpayers may receive a different federal mailing than last year, a post card with a mailing label if they filed electronically, or no booklet if they hired someone to prepare their taxes, said Marie A. Medeck, acting district director for the Internal Revenue Service in Delaware and Maryland.

"We are saving taxpayers millions of dollars of printing and postage costs by no longer sending the booklets to taxpayers who don't use them," she said.

Among the changes in federal taxes this year:

Workers will pay Social Security taxes on wages of up to $72,600, up from $68,400 last year.

Personal exemptions have risen $50 to $2,750. Standard deductions for those who don't itemize have gone up $50 to $4,300 for single taxpayers; up $100 to $6,350 for heads of households; up $100 to $7,200 for married couples filing jointly; and $50 to $3,600 for married couples filing separately.

The maximum child tax credit rises $100 to $500 for each qualifying dependent child under age 17.

Those repaying student loans can deduct up to $1,500 in interest, a $500 increase from the year before.

Smokers can now include in their medical expenses the cost of programs to stop smoking and prescribed drugs for treating nicotine withdrawal.

The IRS, in partnership with the National Center for Missing and Exploited Children, also will include photographs of missing children in tax booklets.

Federal and state tax officials said they have expanded assistance available to taxpayers. And, with respect to state and federal taxes, the Maryland comptroller had this filing advice: "Don't wait until the 15th."

Need help?

For publications and questions on state taxes, visit the comptroller's Web site at www.marylandtaxes.com. You can submit tax questions via e-mail to taxhelp@comp.state. md.us. Or, taxpayers can call 410-260-7980 from Central Maryland and 1-800-MD-Taxes from elsewhere.

For information on federal taxes, call 1-800-829-1040. Visit the IRS Web site at www.irs.gov for information about electronic filing.

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