As the summer season approaches, I want to remind students who are fortunate enough to find employment that there is a way to avoid unnecessary withholding of income tax from their wages.

Employers are required by law to withhold for both income tax and Social Security (FICA) tax. You can't get off the hook for Social Security, but you can skip the income tax bite.

If you had no income tax liability in 1981 and expect to have none for 1982, you can instruct your employer not to withhold income tax.

You do this by completing line 6 and writing the world "Exempt" on the Form W-4 you fill out when starting to work. Then you will get more of your wages each payday and will also avoid filing a tax return next winter for a refund of the tax that would otherwise be withheld.

This waiver of tax withholding is not limited to students with summer employment. It is available to anyone who meets the dual requirements of no 1981 tax liability and none expected for 1982.

For example, if you're a senior citizen working as a sales clerk during the Christmas shopping season and you fit the rules, you can take advantage of the "Exempt" status also.

But don't file a false W-4 just to hold on to your money until tax time. A fine of $500 may be imposed for filing a Form W-4 that improperly reduces or eliminates tax withholding.

Question: I purchased a house in late 1980 that I later converted to rental property. Since the property needed painting and other repairs, I didn't advertise the house until 1981, and rented it effective Jan. 15, 1981. Does this property qualify for the new 15-year depreciable life?

Answer: My first reaction was to say "yes," because IRS publications say that applicaton of the new rules for depreciation depends on when the property is "placed in service," defined as being "in a condition or state of readiness and availability."

But the experts at the IRS tell me that their interpretation is different. They say that the house was in a condition of availability when you took title, despite the maintenance work you felt it needed before rental.

Appearing to concur with this view, Commerce Clearing House says (in "Financial and Estate Planning"): "ACRS does not apply to real property if the taxpayer or a related person owned the property during 1980."

("ACRS" is the Accelerated Cost Recovery System that replaced the old depreciation methods on Jan. 1, 1981.)

At another point CCH says that "property is not considered owned until it is placed in service." This brings us full circle to the IRS definition and interpretation of the term "placed in service"--and the IRS says their interpretation is derived from the statute.

As I see it, you have three options. You can accept the IRS position as I have explained it and use the old depreciation system in effect before 1981. Or, you can write to the IRS with an explanation of the circumstances and ask for a letter ruling.

In the absence of regulations on the subject, you can react as I did initially: Interpret "placed in service" as meaning when the property was put on the rental market and use the new ACRS to figure depreciation.

If you take the latter course, you can anticipate that the IRS may question your position; you should be prepared to argue your case in tax court.

In addition, if you go this route, to be consistent you should capitalize all the maintenance expenses incurred before the date you placed the property on the market.

On the other hand, if you start depreciation in 1980 under the old rules, you can write off as current expenses all your maintenance costs (but not capital improvements).

Q: In 1981 many financial institutions began charging an annual fee of $15 or more on bank credit cards, in addition to the monthly interest charges. I know the interest is deductible if one itemizes--but how about the annual fee? A: Sorry, but the annual fee is considered a charge rather than interest and as such it is not deductible as interest on Schedule A.