What's New in Taxes This Year?
Don't Forget to Put Your Social Security Number on Your Tax Form!
To protect your privacy, your social security number (SSN) is not printed on the peel-off label that comes in the mail with the instructions booklet. This means that you must now enter your SSN in the space provided on the tax form. If you are married filing a joint return, also enter your spouse's SSN. Be sure to list the SSNs in the same order as the first names, and in the same order each year.
IRA Deduction Restored for Some People Covered by Retirement Plans
You may be able to take an IRA deduction if you were covered by a retirement plan and your modified adjusted gross income is less than certain amounts. If you are married filing jointly and you were not covered by a plan but your spouse was, you still be eligible. See the instructions for details.
Roth Conversion IRAs
If you converted part or all of a traditional, SEP, or SIMPLE IRA to a Roth IRA in 1998, you may have to file Form 8606. See Form 8606 and its instructions for details.
Penalty-Free IRA Distributions
The additional tax on an early distribution from an IRA may not apply if you paid higher education expenses for yourself, your spouse, or your children or grandchildren. The tax also may not apply if you paid expenses related to the purchase of a home by a first-time homebuyer. See Form 5329 and its instructions for details.
Foreign Tax Credit
If you paid income tax to a foreign country, you may not have to file Form 1116 to claim the foreign tax credit. See the instructions for details.
Looking Ahead: What To Expect in 1999
Expect increases in all the major deductions introduced in 1998, including Child Tax Credits, Student Loan Interest Deduction, and the Self-Employed Health Insurance Deduction. The IRA Deduction will also be expanded to include more People Covered by Retirement Plans.
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