Long-Distance Providers to Clarify Rate Plans for Users.

PEOPLE hate being nickled and dimed to death, even when they can afford to pay. That's probably what ticks them off when they read their long-distance telephone bills.

Pretty soon, you'll be able to put your "phone rage" to good use. Starting Aug. 1, you'll find better and easier ways of comparing rates and fees.

On the surface, today's discount plans look super-low-cost. Intense competition in per-minute calling rates has knocked the prices down. Per-minute rates should drop further as long-distance and local-phone companies invade each other's markets.

But the phone companies keep reaching for revenues in hidden corners - surcharges, fees, directory assistance, operator assistance.

By Aug. 1 you should receive a written agreement from your long-distance carrier, disclosing all its rates and terms for state-to-state calls. You'll also find it on their Web sites.

That will be your moment to shop anew for a long-distance service. It might even be cheaper to drop your long-distance company entirely and use one of the 10-10 "dial around" numbers.

Here's a shopping guide:

* Basic rates. These are charged to people who haven't signed up for a discount calling plan. You're paying the highest rates on the card.

AT&T just announced an increase in its basic rates, effective July 1. Customers are paying 1.6 percent to 11 percent more, depending on the time of day they call.

The new price range runs from 16 cents a minute (weekends) to 30 cents (weekdays), with no minimum monthly phone-usage fee. If you switched to a basic calling plan, you'd pay 10 cents a minute on Saturday or Sunday. MCI's charges more on Saturday but matches the 10-cent Sunday rate.

Basic-rate customers generally don't make a lot of calls. Even so, you'll save money by making all long-distance calls on Sunday - either through MCI or by getting on AT&T's Sunday 10-cent plan, said Sam Simon, chairman of the Telecommunications Research & Action Center (TRAC) in Washington.

* Discount plans. All the major long-distance companies offer discounted per-minute rates, going as low as 5 cents. But you're also charged a monthly fee.

All the rate disclosures should be on the Web sites Aug. 1. The lowest rates often go to people who sign up via Internet and agree to be billed that way.

For free rate comparisons among five long-distance companies, based on specific phone calls, go to trac.org. To find the best carrier (among seven), based on your total calling pattern, send $5 for TRAC's long-distance comparison chart, P.O. Box 27279, Washington, D.C., 20005. Include a self-addressed business-size envelope and 55 cents in stamps.

Discount plans change, so don't settle into the plan you choose. Keep calling your long-distance company to see if there's something cheaper.

* Extras. You'll find many other fees on your long-distance bill, going by varying names - say, fees for connecting to the local phone company, special state charges, subscriber-line charges, directory. assistance and a federal universal-service (or "connectivity") fee.

Some phone companies charge higher fees than others. So shoppers should factor them into the total price.

* Dial-arounds. With these services, you don't have to sign up with a particular long-distance phone company. You place each call independently, using a 10-10 number.

Some of the 10-10s have no minimums, no monthly fees and low per-minute rates. Some give excellent discounts for 10- or 20-minute calls. A few even have no universal-service charges.

Syndicated columnist Jane Bryant Quinn can be reached in care of the Washington Post Writers Group, 1150 15th St., Washington D.C. 20071-9200.

Tax Law Catch for College Savings Plans

I've written many columns about the ways you can save money for college. I've especially cheered the change in the tax law that lets you save for college tax free.

Now I've learned something that gives me pause.

Tax-free college investment plans still look good for higher-income people.

But there's a problem for people who can save only modest amounts for their children's education. You might want to save somewhere else- say, in a Uniform Transfers (or Gifts) to Minors account.

Here's the story - an important one.

* There are two major college investment plans: the revamped Education IRA (EIRA) 8 and the 529 college-savings account.

* The new EIRA - Starting next year, you can contribute up to $2,000 a year for each child under 18. You qualify if you're married with an adjusted gross income under $190,000, or single under $95,000. (EIRAs can be used for grade school and high school, too.)

* College 529 plans - They're run by the states and open to everyone regardless of income. Starting next year, all your investment gains in EIRAs and 529s will come tax free if the money is used for qualified education expenses. But there's a hitch.

To explain it, I first have to tell you about the two kinds of write-offs you get for college tuition on your tax return.

* Tax credits - The Hope tax credit, good for the freshman and sophomore years. You get 100 percent of the first $1,000 you pay and 50 percent of the second $1,000, for each child you have in school.

The Lifetime Learning Credit applies to any year you don't use the Hope. At present, it's worth $1,000 (20 percent of the first $5,000 of your family tuition expense). Starting in 2003, you'll get up to $2,000 (20 percent of the first $10,000 in tuition).

* A new tax deduction- You'll be able to deduct up to $3,000 in tuition payments in 2002 and 2003, and up to $4,000 in 2004 and 2005. That's for couples with incomes under $130,000 and singles under $65,000.

When paying specifically for tuition, you can use money from an EIRA or 529 plan only for the amount that wasn't covered by a tax credit or tax deduction!

Well-off families can do it. So for them, funding an EIRA or 529 is a no-brainer. People with modest college savings should consider an alternative: putting the money into a Uniform Transfers (or Gifts) to Minors account at a bank or mutual fund.