Show BANKING fl flIS t I IS EVERYBODY'S El r BUSINESS 1976 Tax Reform It Act-It Could Affect You n fly Willis W. W Alexander Executive Vice President American A rica II Hankers Association With so much consumer legislation being passed Its It's Increasingly difficult for the average American to keep up up- to-date to with current rights and responsibilities One law you should check into quickly though is the Tax Reform Act of 1976 From senior citizens to single working parents almost everyone everyone every everyone one Is affected In one way or another For example alimony all ali mony many is now deducted from gross Income rather than be be- ing ingan an itemized deduction The retirement income credit for forthe forthe forthe the elderly has been broad broad- ened Major child care expenses ex expenses expenses for working couples or single parents have now become become be be- come a tax credit Business related Business related moving cost deductions have been liberalized lib lib lib- On the other hand home office deductions have been tightened to the point of near elimination I tion and maintenance deductions deduc deduc- lions for vacation homes rented out during part of the year are also more stringent The booklet mailed mail d to taxpayers taxpayers tax tax- payers along with their tax return re reo return turn forms contains all of the Ins and outs of the new law lawand lawand lawand and would be well worth studying before you start your computations for 1976 Then when you do begin give a second thought to your bankIng banking bank bank- bankIng ing relationship and especially I the following items e Interest earned on deposits de de- deposits posits must be counted as in income in in- come e You may deduct the ln- ln In Interest terest paid on a personal bank loan from your gross income If you itemize your deductions and file long form 1040 e Interest paid on overdraft overdraft overdraft over over- draft or of line checking accounts and credit card finance charges are also deductible Dont Don't forget the interest on your home mortgage its it's usually your biggest interest deduction If you withdrew funds from a certificate of deposit before it reached maturity you lost interest in the form of to a penalty for early with with- That amount is deductible deductible deductible de de- de- de from gross income Bank customers who opened an individual retirement retirement retire retire- ment account IRA during 1976 must file a separate form to claim the for the amount contributed And of oC course if you need additional copies of the themore themore themore more commonly used forms they are are available in many bank lobbies A few final tips Start saving and collecting your deduction de de- de- de and interest income records for 1977 now If If they are in one place next February February February ary your job will be half done To help keep track ble hie contributions and other deductible expenditures some banks now offer tax tax saver saver check registers with spaces for deduction notations And finally keep all cancelled checks for Cor a minimum of three years ears In case ease of or a aa a. a dispute c you may need them to verify I any deductions you claimed |