Tax Tip

As tax returns roll into the Internal Revenue Service, one glaring error is cropping up among filers with dependents. Many parents forgot they received a child tax-credit advance last year and are trying to claim the full $1,000 per child on their 2003 returns. No can do. Here's what is causing the problem: A tax cut enacted in May gave more than 25 million households an early cut of the child tax credit, which was increased to $1,000 from $600 per child in 2002. The advance hit mailboxes in the summer, up to $400 per child claimed on your 2002 tax return.

I just started working as a part-time bartender on weekends. My co-workers tell me that part-timers don't have to declare tips. But colleagues at my full-time job said I should always declare tips. Who's right? Your full-time pals are right. The Internal Revenue Service considers tips income, and you must declare them. "Part- or full-time, they do have to report their tips," an IRS spokesman said. If you receive at least $20 in tips a month, you should report them to your employer, who will withhold federal income taxes and taxes for Social Security and Medicare.

The deadline for filing your personal income tax return is less than three months away. For the weeks leading up to April 15, Your Money will provide tax tips designed to help you file your 2003 return. Here is the first.Sometimes the simplest things can trip up your tax return, and none is as common as a muddled or missing Social Security number. It's one of several common clerical errors, including bad math and unsigned returns, that can delay your refund if you're owed one. Incorrect or missing Social Security numbers accounted for the most frequent math or data entry errors on 2002 returns.

ASSORTED money matters: REIT RUNDOWN: "After depressed years in the late 1990s, [real estate investment trusts] played catch-up to the S&P 500, outperforming the index by 40 percent in the 12 months ended June 30, 2001. REIT valuations are still attractive." (Ken Gregory, investment adviser) TAX TIP: "Falling tax rates make it worthwhile to defer income into next year and accelerate deductions into 2001. Every income dollar shifted from 2001 into 2002 can save 0.5 percent in taxes; the same with every dollar of deductions accelerated into 2001."

THIS TIME of year, the grousing gets pretty heavy about paying income taxes by April 15. Tax collectors are not very popular.While most of the ire is aimed at the Internal Revenue Service, the comptroller's office in Annapolis gets its share of brickbats.Into this furor strolls Yvonne Daugherty, an 11-year veteran of Louis L. Goldstein's shop, who has managed to do the impossible: satisfy inquiring taxpayers.Ms. Daugherty, 62, handles the department's electronic mail. That is not an idle job. This spring, the comptroller's office is receiving 120 e-mail inquiries a day about how to fill out tax forms or interpret complex tax language.

TO COPE with this roller-coaster market, here's some wisdom:"Always sell what shows you a loss and keep what shows a profit." (Jesse Livermore, highly successful investor.)"You can't win when you speculate. It's like holding a bear's tail. If you lose your hold, the bear will get you." ("Dollars & Sense," 1920.)"Invest in simple companies that appear dull, out of favor and haven't caught the fancy of Wall Street." ("One Up on Wall Street," by Peter Lynch.)MONEY FROM HOME: Woman's Day, Aug. 6, offers these hints under "How to Start a Home Business":"Consider a service business, like party planning, bill collecting, bridal consulting, bookkeeping.

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.Q: My father, a widower, no longer wants to live in his house alone. He took an apartment and had his attorney put his older child's name on the deed. I am the younger child, and my sister gave me $50,000, which is half the value of the house. Are there any tax consequences?A: Assuming that your father made [the house] a gift to your sister, and she made a gift [of the money]