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PAGE 7 - PLAINDEALER - FRIDAY. NOVEMBER 9,1W3_ This column of questions and answers on federal tax matters is provided by the local office of the U.S. Internal Revenue Service and is published as a public service to taxpayers. The column answers questions most frequently asked by taxpayers. There&awardfor thekindofwoimi whohascontrc of everything but her money. Dumb. You may know her. The confident working- girl who's making it on her own. She has a nice apartment, stylish clothes, good taste in wines. And no savings. She should discover the Payroll Savings Plan. It's simple to sign up at work. After that, an amount she specifies is set aside each payday and used to buy U.S. Savings Bonds. With U.S. Savings Bonds, it doesn't take long to build up a healthy nest egg. Which means she's ready for anything from unexpected emergencies to an exotic vacation. The Payroll Savings Plan--a smart way to stay in control. Ihke . stock . ln^menca. Buy U. S. Savings Bonds Now E Bonds pay 54% interest when held to maturity of 6 years, 10 months (4% the first year) Bonds are replaced if lost, stolen, or destroyed. When needed they can be cashed at your bank. Interest is not subject to state or local income taxes, and federsi tax may be deferred until redemption. » U S Government does not pey for this advertitem « cressmtQ as a Public service m cooperation with Dartmani ol the Treasury and The Advertising Com (In IUrns SI Hrjr.u.s I'rtt.oir © ifTlGrttw Features THE MEANS OF COMMUMCAT/OM ACROSS DLSTANCBS HAVE YAR/ED OVER CEHTUR/ES... TODAY H/GH FREQUENCY 7RANSM/SS/ON Y/A CABLES AND SATELL/TES //AVE EXTENDED THE RANGE AROUND THE WORLD. F. e* s° OVERSEAS COMMUA//CA T/OH /S MADE POSS/BLE TOPAY BY THE COOPERAT/ON OF THE VAR/OUS TELEPHONE CCMFMN/ES THROUGHOUT THE WORLD WHOSE COORD/NATED ACT/ONS HAVE ARRANGED A WORLD W/DE D/AL/HG PLAN, KNOWN AS 1000 FOR JNTERNATFONAL D/RECT D/STANCE D/AL/NG, (goHSEQUENTL Y 0YRECT PFAL/NG /S POSS/BLE; TODAY, BETWEEN MANY PARTS OF U. S. AND LLP S TO 20 MAJOR COUNTR/ES% # //H T/ME 7H/S SERV/CE W/LL BE EXPANDED TO INCLUDE THE TOTAL U 5. AND ALL THE MAJOR COUNTR/ES OF THE WORLP. IMAGE MAKER . . . Nu­ clear scanning machines used to produce images of internal body organs undergoes final reliability testing at the Wal- tham, Mass. plant of the manu­ facturer. The machine, which supplements x-ray equipment in hospitals, "senses" small amounts of nuclear radiation emitting from the body. This, in turn, is converted into im­ ages that can be "read" by doctors. Shown with the ma­ chine is Joan Skaletsky of Wo- burn, Mass. Q. I've been awarded a scholar­ ship to graduate school. 1 haven't decided yet whether I want to stay in school to get a degree or just to take some courses I'm interested in. Will it make any difference from a tax standpoint whether or not I'm a degree candidate? A. Yes. If you are a degree candidate, there is no limitas, tion on the amount of scholar­ ship or fellowship grant that may be excluded from your in­ come. On the other hand, if you are not a degree candi­ date, the amount you receive as a scholarship or fellowship, including the value of services and accommodations provided to you, may be excluded from your income only up to $300 times the number of months for which you receive amounts under the grant during the tax year. There is a 36 month limit under the exclusion for non- degree students. Q. Do you have a booklet that explains what a taxpayer's rights are in case he's ever audited by the Internal Rev­ enue Service? A. Yes. Write your nearest IRS office for a free copy of IRS Publication 556, "Audit of Returns, Appeal Rights and Claims for Refund." Q. I work as a waitress in a restaurant. Any tips I get I have to split with the busboy. How much of the tips do I have to report to my boss for purposes of income and social security tax withholdings? A. Only those tips you receive on your own behalf are counted. Thus, where em­ ployees split tips, each em­ ployee reports only his share to his employer when his monthly tip income is $20 or more. Q. I earned over $2,500 from my summer job before I went back to school. Will this cause my parents to lose my de­ pendency exemption? A. No. If you are a full-time student for any part of five months of the year or und6r 19 at the end of the year, your parents can claim you as a dependent regardless of how much money you make. Of course, they must meet all the other dependency tests, includ­ ing the furnishing of more than one-half of your total support. Q. My wife and I are going to purchase one U.S. Savings Bond each month for my eon's college education. Would it be more advantageous from a tax standpoint if I purchased the bonds naming my son and my­ self as co-owners or naming him sole owner? A. From a tax standpoint, naming your son sole owner of the bonds would be more ad- It just keeps getting better. Come in and see Olympique, the machine that has long been the standard of reliability among snowmobilers. This year, it's better than ever. OtYMPIQUEbyski-doo ®R«W5tered Trade Mart of Bombardier Limited. UNSON ARINE PHONE 815 385-2750 LOCATED ON ROUTE 1V in V010. ILLINOIS 1 B l o c k S o u t h o f R t 1 7 0 S M i l e s S o u t h o f F o i l u k e EV KLAPPERICH FOR THE SEASON FINALE' AT ZION BENTON, THE McHENRY COACHING STAFF HAS ONCE AGAIN SELECTED TWO PLAYERS OF THE WEEK. EV KLAPPERICH WAS CHOOSEN ON OFFENSE FOR HIS 111RUSHING YARDS IN 20 CARRIES WHICH RESULTED IN 1 TOUCHDOWN. ON DEFENSE. STEVE HURCKES WAS NAMtD THE LEADER FOR THE WARRIORS. STEVE HURCKES mjvp9fi TRU-VALUE i^K PHARMACY 1327 N. Riverside Dr. McHenry vantageous, since interest on U.S. Savings Bonds bougrht in the name of the child is income to the child not the parent. This is so even if the parent paid for the bonds and is named beneficiary. However, interest on bonds purchased by a par­ ent naming his child as co- owner is taxable to the parent. For more informat?on, see IRS publication 576, "Tax Infor­ mation on United States Sav­ ings Bonds." Contact your lo­ cal Internal Revenue office for a free copy. Q. Are brokerage fees deduc­ tible? A. Fees you pay a broker to collect your bond interest or dividends on shares of stock are deductible as miscellaneous deductions. But brokerage fees paid to acquire investment pro­ perty, such as stocks or bonds, are not deductible. They are added to the cost of the pro­ perty. Q. I work as a waitress in a restaurant. Occasionally, a group of customers will use our banquet room for a private party. Instead of tipping, cus­ tomers are required to pay a service charge which is split among the waiters, waitresses and other employees. Should I report this amount as a "tip" to my employer for tax pur­ poses? A. No. Your share of this ser­ vice charge is not a tip, but is part of your wages paid by the employer. As such, it is taxable, but does not have to be included in your report of tips to your employer. Q. My son ia 20 and works full time during the day and goes to school at night. Can I still claim him as a dependent re­ gardless of how much money he makes? A. Generally, you may not claim a person as a dependent if he had gross income of $750 or more during the year. The only exceptions to this rule oc­ cur if your child is less than 19 at the end of the year or a full time student during five months of the year. In your , son's case, he is over 19 and is ' not considered a full time stu­ dent because he is attending night school and is employed full time during the day. Q. I gave my son and daughter- in-law $2,000 as a wedding gift. Will they have to pay tax on this gift? A. No, gifts are not taxable to the recipient. A donor does not have to file quarterly gift tax returns until his total gifts to any one person for the year exceed $3,000. Q. I pledged $50 as a contribu­ tion to a political party. How much of this political contribu­ tion is tax deductible? A. A political contribution is eligible as a credit against your income tax of one-half the con­ tribution up to $12.50 on a single return, $25 on a joint re­ turn or alternatively, as an itemized deduction of up to $50 on a single return, $100 on a joint return. Remember, you must pay the contribution for it to be eligible for the deduction or credit in the year paid. Unfulfilled pledges are not deductible. Q. Does it make any difference taxwise whether payments to an ex-wife or ex-husband are labeled alimony or child sup­ port in a divorce decree? A. Yes. Alimony or separate maintenance payments are de­ ductible by the person making the payments and taxable to the recipient. The reverse ia true of child support payments. They are not deductible by the payor and are tax free to the recipient. Q. I use my car to drive back and forth to work. Can I de­ duct my automotive costs as a business expense? A. No. The cost of repairs, gas and similar items incurred in connection with an auto used to and from work are nonde­ ductible commuting expenses. -NOTICE- WE WILL BE CLOSED MONDAY & TUESDAY (NOVEMBER 12 & 13 0NL7), BUTTVILL" RESUME REGULAR BUSINESS HOURS THURSDAY, NOVEMBER 15 NICK FREUND & RAY SIMON'S " w NECK tJP " Complete Barbering/Styling for Men & Boys 1408 N. Riverside Dr. McHenry 385-8373 BEAUTIFUL GUADELOUPE ... Cruise ships and schooners are a common sight in the port of Pointe-a-Pitre, Guadeloupe'* principal city. Not all home insurance policies are alike. You'll find out when you have a claim. Many people make the costly mistake of assuming that one insurance policy is the same as, or just as good as, another. And they discover too late that the attitudes of different companies toward claim payments vary widely. That's why it's a good idea to consult an independent agent. We help you plan the coverage that protects you best. We place it with the most suitable of the several insurance companies we represent. And if you should have a claim, we're on your side. This helpful booklet, "How To Avoid Costly Mistakes In Home Insurance," is yours free for the asking. Just call or complete and mail the coupon. FRANK LOW "J»' France" lyCIIDAiirr 1320 N. Riverside Dr. f IHdUlfflllUC 385-6541 _ | Please send me a free copy of your booklet, "How | To Avoid Costly Mistakes In Home Insurance". NAME ADDRESS. I CITY _ .STATE .ZIP. & • OPEN HOUSE - I0VEMBER l«h,Uth;17th,Utl 10 A.M. - 3 P.M. EACH DAY SPECIAL INFLATION STOPPER . . The holiday season is almost upon us Our working displays are ready for you to see. We are holding live cooking demonstrations at our place of business on the one and only Weber Gas Barbeque Kettle. Demonstrations will be held on Saturday and Sunday, November 10th and 11th, 17th and 18th. From 10:00 a.m. until 3:00 p.m. Here is an opportunity to see the only gas barbeque on the market that is truly a second oven for you. You will be given a $20.00 discount off the retail price of a Weber Gas Kettle, upon proof of owning a Weber Charcoal Grill. If you don't own a Weber Charcoal Grill you will receive absolutely free the El Patio Dual Mantel Gas Lite which retails at $56.00, with the purchase of a Weber Gas Grill. 'Ifoliday Gaslights have always been subject to the same one big weakness: They are far too easy to burn or break out. Holiday's unique design solves the breakage problem because the outside body effec­ tively absorbs the impacts instead of passu*; them directly to the mantles. STILL ANOTHER SPECIAL With the purchase of a Van Dorn infra Red Gas Garage Heater at list price, you will receive absolutely free the excellent El Patio Gas Lite. All these truly fine products are hooked up for demonstration purposes at Arvidson & Sons! This special offer ends Sunday, November 18th. Forty-eight (48) hour delivery and installation available upon request. 1 1 V 2 " RETT A*UMC!AJCUL £ JSOHD, 9HC. Rt 31 between Crystal Lake and McHenry Phone xi545<MMftk Mon.-Fri. 8 to 5 Sat., Sun. (Nov. 10,11;17,18) 10 to 3 HOURS: