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--THE YANCEY -OURNAL FEBRUARY 24, 1977
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Q. I earned SII,OOO
through last August 9 when 1
applied for social security
retirement benefits. I haven’t
worked since. Must I send an
annual report of earnings to
social security?
A. People under 72 who
earned over $2,760 for 1976'
and received social security
retirement, survivors, or de
pendents payments for one or
more months must send social
security a report of their
earnings by April 15, 1977.
An earnings report form is
available in any social security
office. IP you earn over S3OOO
T " r-tr: -----
CHECKLIST
FOR
; TAXPAYERS
If you found your taxes
tricky last year, this year they
may even be trickier because
of the Tax Reform Act of 1976.
A wording to Price Water
house, a worldwide indepen
dent accounting firm, there
are certain areas you should
be aware of when preparing
your taxes and planning your
personal tax strategy.
Seven Ways To Save
1. Security Gains and
Losses—The holding period
for determining long-term
capital gain or loss increases
to more than nine months on
January 1, 1977. No longer
will the holding period for
termination of long-term capi
tal gains be six months. For
the future, there are addition
al changes planned. In 1978
the holding period will in
crease to twelve months.
2. Gifts—One of the advan
tages of making gifts prior to
1977 is that the total transfer
cost is reduced. Also, the
timing of gifts in 1977 is
important since gifts in the
first six months of 1977 are
only eligible for a $6,000
unified credit.
' 3. Estates—Under the. new
tax law there is a single
unified tax rate for both
estates and gifts. Another
change is the elimination of
the $60,000 exemption for
estates—and a replacement
with a unified credit. There’s
also an increased marital
deduction for both estate and
gift tax.
4. Itemizing Versus Stan
dard- Deduction—Review
possible deductions —par-
ticularly contributions, state
and local taxes—not only to
determine whether you
should itemize but to deter
mine whether payment in
1976 rather than 1977 is
beneficial.
5. Interest Deductions—ls
you borrowed money to fi
nance investments you may
have a more difficult tax
problem now. Investment
interest expense is limited to
SIO,OOO plus net investment
income—excluding capital
gains.
6. Minimum Tax-
Designed to tax incomes that
otherwise would go un taxed—
but will affect more tax
payers now. The rate here is
increased from 10 percent to
15 percent. More importantly,
permitted deductions in the
computation are reduced to
the greater of SIO,OOO or one
half the regular tax for the
year.
THE NEW TAX LAWS
may seem mind-boggling to
many taxpayers, but there
are some useful money
saving tips to remember.
> 7. Retirees—ls you retire in
1976 you may be eligible for a
special tax calculation. Ten
year averaging is available
for lump sum distributions
from a retirement plan, but
only if you retire after at least
■ five years' participation in a
qualified pension or profit
sharing plan. With the new
law you can treat the entire
'distribution as ordinary in
come eligible for 10-year aver
aging.
Other Tax Highlights
The new law also includes a
number of changes which
’ affect the tax treatment of
1 various other items such as
alimony payments, child care
credit, vacation home losses,
etc. In short, the Tax Reform
Act of 1976 is comprised of
more than a thousand pages
and reflects significant
changes in our tax
subject of taxes is mind
, boggling. to most —sound tax
advice is more important
than ever— even for the aver
age wage-earner.
Social Security Questions, Answers-
for 1977 you must send in an
earnings report by April 15,
1978.
Q. My mother is 73 and
can no longer be cared for at
home. Will her Medicare pay
anything if she goes to a
' nursing home where they can
help her dress and eat and
give her medicine?
A. Medicare cannot pay
for care that is mainly
custodial, such as helping a
person eat, dress, walk,
bathe, or take medicine.
Q. My only child and 1
have been getting social
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security benefits on her late
father's record since 1971.
But she’s 17 and will get
married next month and she
and her husband will live with
and be supported by me for a
few months. Can she and 1
continue getting social secur
ity payments? I’m 48.
A. The payments to you
and your daughter will stop
when she marries.
Q. I’m a college student.
I’ve been getting social
security benefits several years
on my late father’s record.
But I’ll reach age 22 in March.
Will my checks stop then?
A. You can get social
security benefits to the end of
the semester or the quarter in
which you reach 22 if you’re a
full-time student in school and
remain unmarried.
Q. Do I have to be
permanently disabled to get
monthly disability benefits?
A. Social security can pay
you benefits if you can’t work
because of a severe physical
or mental impairment which
is expected to last (or has
lasted) at least 12 months, or
is expected to result in death.
Benefits start with the 6th full
month of disability.
' Q. I am a 57 year old
widow who has never worked
and am becoming increasing
ly crippled with arthritis. I
understand 1 can get widow’s
benefits on my husband's
social security record when 1
am 60, but is there any help I
can get now?
A. A widow 50 to 60 who is
severely disabled and can’t
work may qualify for monthly
social security benefits on her
husband’s record. If your
income and resources are
limited, you also may be
eligible for supplemental se
curity income (SSI) payments.
The people at any social
security office will be glad to
explain both types of benefits.
Q. My doctor sent social
security a report describing
my disability. I can’t work at
my job, but my claim was
turned down. How come?
A. Possibly you hadn’t
worked long enough in jobs
covered by social security.
Also, to qualify for disability
payments,, you must be
unable to do any substantial
gainful work for which you’re
Suited by age, education, and
experience. You may no
longer be able to do heavy
lifting for example, but
probably could adapt —to
lighter work.
Q. I understand my' 27
year old mentally retarded
son who liy.es with me njay get
monthly social security checks
on my record when I die or
start getting retirement or
disability benefits. Can’t he
get some kind of payments
now?
A. He may be eligible for
supplemental security income
(SSI) payments, depending on
his income and resources.
Since he is an adult, any
income you or other family
members have will not affect
his eligibility. However, his
SSI payment may be reduced
by one-third since he lives at
home.
Q. My social security
disability claim was turned
down and I want to appeal the
decision. Do I need a lawyer
to do this?
A. Most social security
business, including the ap
peal of a claim, can be done
without a lawyer. The people
in any social security office
will be glad to help you get an
independent review of your
claim. If you prefer to have a
lawyer, you may. Ask any
social security office for the
leaflet: Social Security and
your right to representation.