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FIVE TAX TIPS FOR YEAR-END PLANNING

 WORCESTER, Mass., Dec. 29 /PRNewswire/ -- The ongoing changes in Washington should not detract from normal year-end tax planning. Jerry Weihs of Allmerica Financial offers five basic exercises that can be done before the year ends to help save considerably on 1992 taxes.
 1) take full advantage of retirement plans. A typical 401 (k) plan contribution can lower the individual's payroll tax, and earn interest on a tax deferred basis. Self employed individuals can use Keogh plans and other simplified employee pension (SEP) arrangements in similar ways.
 2) Combine medical and other deductions into one year. Medical expenses, for example, are deductible only if they exceed 7.5 percent of adjusted gross income. One can get some extra needed dental work, for example, to increase the level of medical expense for 1992.
 3) Be wary of new interest-deduction rules, which are complicated. Personal interest, such as credit card interest, is no longer deductible. Mortgage interest is now deductible only up to $1 million on indebtedness on a maximum of two homes. Interest on home equity loans up to $100,000 is generally fully deductible. Investment interest, which is debt incurred to purchase stocks, bonds, etc., is fully deductible to the extent there is investment income to offset it. Record keeping is important to ensure that your interest deductions are qualified within Internal Revenue Code rules, especially if it appears to the IRS that you are using a particular source of credit for more than one use.
 4) Plan carefully for the alternative minimum tax, which is intended to ensure that those with many, large deductions will pay at lest some tax. The alternative minimum tax typically applies to "preference" items, such as accelerated depreciation and certain tax-exempt interest earnings. It's important to seek financial planning assistance to determine how this tax will impact you.
 5) Review and, if necessary, correct estimated payments before Dec. 31. Those who make quarterly estimated payments and have had an increase in salary of more than $40,000 in 1992 will no longer be able to estimate their payments based on the previous year's tax liability.
 -0- 12/29/92
 /CONTACT: Richard A. Ryan of Allmerica Financial, 508-855-3467/


CO: Allmerica Financial ST: Massachusetts IN: INS SU:

TM -- NEFNS1 -- 0232 12/29/92 07:30 EST
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Date:Dec 29, 1992
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