to - MANCHESTER HERALD. Monday. Aug. 5, 1985 MANCHESTER FOCUS U.S./WORLD WEATHER Both parties gather Kids get into spirit Chaiienger readies Clouds, fog tonight: B U SIN ESS Buckland signatures of mime troupe visit for return flight humid Wednesday Proposed tax changes affect retirement plans ... page 3 ie11 ... page 10 ... page 2 determining whether Social Security benefits are income in 1986 without owing tax or filing a return. The tax-reform legislation that President Reagan taxed; the payout doesn't count toward the That's the sum of the new $2,900 flat standard appeared to toss almost casually to Congress is $32,000/$25,000 threshold. However, under the tax deduction and the new $2,000 personal exemption. It actually among the most complex tax laws ever Y o u r overhaul, lump-sum payouts would be treated and would be a 43 percent increase over the current 1985 proposed by any president in our history. The more I level of $3,430. study, the more impressed I become with the taxed as ordinary income. M oney's Result: In the year you receive the payout, you men/women responsible for putting this legislation would almost certainly exceed the threshold and be QUESTION: Suppose part or all of my child's together. W o rth hit with a tax on your SS benefits, income comes from investments: bank interest, Consider the facts in this third in a series of three dividends, the like. Is the tax-free income level the columns that I put together with the assistance of Eli Sylvia Porter QUESTION: I am considering investing in a tax same? J. Warach, a divisional editor in chief of Prentice- ....... .... * Tuesday.Tuesday, Aug. 6, 1905 — Single copy: shelter this year — an oil drilling deal. Under the tax Manchester, Conn. — A City of Village Charm Hall. It touches on retirement. proposals, would 1 be eligible to use percentage ANSWER: YesT as a general rule. Under current depletion to offset the income from the successful law. Bill, your dependent child, cannot use the flat QUESTION: Would the tax overhaul change Social standard deduction to shelter unearned income. But their W-4s if various tax deductions are repealed. welles? Security taxes? this rule would be changed under the tax overhaul. ANSWER: It depends. The tax overhaul would ANSWER: No — but there is a change coming here QUESTION: I will be retiring in a few years. Do the Elarned and unearned income would be basically Medic generally phase out percentage depletion over a already on the books. An increase in the Social tax proposals have any effect on the income tax owed treated as the same way. So Bill could have as much Reps meet Security tax rate is scheduled to take effect Jan. I, on Social Security benefits? five-year period, starting in 1986, as $4,900 in income — regardless of the mix of earned Important; The percentage depletion phaseout 1986. In 1985, the tax is 7.05 percent of the first $39,600 and unearned income — without owing any tax. would apply only to oil properties where production expansion of taxable wages (paid by both employers and ANSWER: Not directly. You would still owe income However, there is a big exception if your child is under begins after 1985. So if production starts by the end of em ployees). In 1986, the rate will be 7.15 percent on a tax on your benefits only if your adjusted income, plus age 14. Bill could then use only the $2,000 personal 1985, you would be entitled to percentage depletion, still higher wage base to be announced later in 1985. one-half of your benefits, excejgds $32,000 $25,000 for exemption to shelter unearned income attributable to singles). But there is a proposed change in the mles year after year, for as long as production continues. in attempt to Employers will be changing withholding many times a cash or property gift received from you or your is muiied in 1986. for retirement plan payouts that could have a definite spouses, There is the Social Security tax increase on wages impact on the lax on Social Security benefits. QUESTION: Under the tax reform, how much NOTE; It still would be a good idea to shift income to paid after Dec. 31, 1985. Income tax withholding may Under existing law, lump-sum payouts from income could my dependent son. Bill, earn from a Job be changed twice — in January and again in July 1986 retirement plans are taxed under a special 10-year without owing any tax? your child through gift giving — assuming income from the gift doesn't top $2,000. Consult your By Kathv Garmus — to reflect the $2,000 exemption and the lower tax averaging provision, separate and apart from your Assistant City Editor -other infMme. So a payout currently plays no part in xKTcwrR; Your son could have as much as $4,900 in accountant/lawyer. avert strike rates. And more employees than usual may amending Town officials plan to begin studying the town's paramedic Bv Joe llluzzi Whether Ueberroth will use the service to determine if a second "best interests of baseball" pow­ 5 unit Is needed — one that, if United Press International 6 Firms Toyota eyes auto pact ers stated in Rule 12 (a) of the recommended, could figure promi­ MaJor League Agreement to im­ NEW YORK — Player and nently In a dispute over the town's pose a settlement or in some way owner representatives met today Buckland firehouse. prevent a strike today remained to Health Director Ronald Kraatz. for informal discussions that both avoiding Bv Michael Babad be seen. THE COST OF CAR OWNERSHIP sides hoped would lead to a full who will head the study, said today Should the strike last long United Press International m scale resumption of talks designed Midsize models show greatest decrease that the workload and response enough to force the remainder of to avert a maJor league baseball TORONTO — Canadian officials Ume of the existing unit of the regular season to be canceled, strike tonight. iitigation suspect Toyota Motor Corp. even­ paramedics are the maJor issues in the teams currently in first place tually will try to Join North determining whether a second unit %'X' "I know that at least four people would most likely be declared American automakers in the 1965 is needed. are in a session right now." said champion. They include the To­ Bv John DeMers DPI photo auto trade pact between Canada Kraatz said one of the main American League spokeman Bob ronto Blue Jays in the AL East, the United Press International purposes of the study is to develop and the United States. Fishel, "but I don't know where California Angels in the AL West, Operating cost per mile ( a set of criteria for evaluating the Police say the Hiroshima protests led to Copley Square is shown early this they are meeting or how long the NEW ORLEANS - Business They believe the Japanese ma­ I the Los Angeles Dodgers in the NL .X: nufacturer has structured its plans paramedic workload, response the arrest of 20 people in Boston in morning. Paint in lower right is to session will last." West and the New York Mets In the law, a $40 billion a year industry, is time and other factors that might facing a future of uncertainty and for assembly plants in Canada and o o connection with painting on sidewalks symbolize mass of bodies incinerated The office of the MaJor League N LE ast J52.31 enter into the need for a second change as corporations sue less the United States tor future access 49.02 50.69 40.S Players Association also acknowl­ The strike may shatter'the Blue to the pact with its duty-free auto unit. as a reminder of the atomic bomb by the expiation^ Jays' dream of becoming the first and turn more to their own staffs 4»> "W e need to get some thinking edged there was a meeting in trade across the Canada-U.S, 44.67 Aa.aa( club to host a World Series game when they feel compelled to dJ'so. together about what is an accepta­ progresss but would not reveal its Some idealists, who emphasize border. location. outside the United States. Auto industry representatives ble level of response," he said. In 1981 when the strike lasted 50 their pragmatism as well, point to The study was formally Prospects of maJor league base­ hope the move spurs other Japa­ days, a split-season format jvas the public price tag of private legal launched at the request of the ball play tonight were considera­ nese automakers to play by the developed but that came under services. Tax deductions for these Emergency Medical Services ‘No more Hiroshimas' bly dimmed Monday when negotia­ same rules in North America. heavy criticism from the Plvyers deprive the national coffers of Council, which oversees the activ­ tors failed to crack the impasse on "1 suspect they intend to (Join in Association and m anagem ert. much-needed revenue. ity of the paramedics. The para­ demands made by both side. the trade agreement) but I don't There is nofenough time left In the The corporations, finding a Subcompact Compact MId-sIze Intermediate Standard medics, who are also firefighters, what happened to the city on that “ This is the next closest thing to recent history of litigation has know when they'd achieve auto Bv Janet Snvder a strike. I don't want to say season for that setup to be devised.