Winding up with an income tax bill in March or April that's lower than you expected it to be is sublimely satisfying, particularly if the bottom line shows a refund from Uncle Sam's tax collector instead of a balance due.

So we're back again with Tax Guide XI, to steer you through the maze of tax forms and instructions with explanations, checklists and tips, all designed to help you minimize your tax liability and ease the chore of getting it all figured out.

The early line is not very encouraging. The Economic Recovery Tax Act of 1981 (ERTA) included a number of provisions that took effect on Jan. 1, 1982, plus others scheduled for 1983 and later years.

Add to that the immediate and later changes mandated by the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) and we've got a real can of worms. But we'll take it a step at a time and help you sort it all out.

The emphasis throughout this guide will be on the rules you should be familiar with while working on your 1982 individual income tax return. We will highlight those rules that are different from previous years, and, where appropriate, we'll tell you what's coming for 1983 and later years. We will also discuss District, Maryland and Virginia taxes. General Instructions

Your federal income tax return for 1982 must be postmarked no later than midnight Friday, April 15.

If you can't make the deadline, don't ignore it. You can get a four-month extension to Aug. 15 by filing IRS Form 4868 by April 15. That's double the two-month extension available in previous years.

That's a deferral only of the date for filing, not for paying. You must estimate your eventual tax liability on Form 4868 and pay any estimated deficiency when you file the request for extension. And when you later file your return, you must use Form 1040 and may not use either the 1040A or 1040EZ.

If you're out of the country on April 15, you can get an automatic extension to June 15 without having to make a formal written request. But when you file your return attach a statement explaining the details.

Any payment due should be attached to your tax return unless you have asked the IRS to figure your tax. Make the check or money order payable to Internal Revenue Service and enter your Social Security number on the payment. Do not send cash.

If you live in Maryland or the District of Columbia, send your federal return to the Internal Revenue Service Center, Philadelphia, Pa. 19255.

Federal returns of Virginia residents go to the Internal Revenue Service Center in Memphis, Tenn. 37501.

If you received an instruction booklet from the IRS, use the peel-off label from the booklet on the return. Make any necessary corrections to the information on the label. If you use a professional preparer, provide the preparer with the booklet you received, or at least the page with the label.

This label does not contain any special coding to identify a potentially troubling return for possible audit. It permits optimal use by the IRS of their expensive automated equipment, saving employe hours and taxpayer money.

There are a number of paperwork changes as a result of the tax legislation of 1981 and 1982. This year there are additional forms, additional lines on existing forms and other changes that might be expected to complicate the chore of preparing your tax return.

The IRS has done an excellent job of integrating the changes, and in addition has made a number of graphics modifications that simplify the whole job.

If you were able to prepare your own 1981 return, you should have no trouble this year. And I encourage readers who have hesitated to tackle the job in the past to take a crack at it.

If you do, you must expect to spend considerable time in research. Be sure to follow the line-by-line instructions on the various forms. Because of the many changes, don't attempt to transfer line items from your 1981 return to this year's forms.

If you need more detailed instructions than are given in the information booklet that accompanies your tax forms, pick up a copy of IRS Publication 17, Your Federal Income Tax, at your local IRS office.

Taxpayers who are more fluent in Spanish than in English should get a copy of Publication 579S.

There are also a number of free IRS pamphlets available, each relating to a specific area of the tax law. Although the language sometimes gets a little technical, for the most part the explanations are easy to follow.

A partial list of these special publications is included, by subject, in the tables on reporting your income, adjustments and credits.

If personalized help seems necessary or you want an answer to a specific question, you can get free advice and assistance from the IRS, either in person at any IRS office or by phone over special taxpayer assistance lines.

Despite attempts to eliminate this taxpayer service, it survives. But budget restrictions are likely to reduce the number of people assigned to taxpayer assistance--you can expect longer lines at IRS offices, more busy signals if you phone.

Taxpayers who live in the District or in Montgomery or Prince George's County should call 488-3100 for help. Residents of Northern Virginia are served by the Baileys Crossroads office at 557-9230.

You will generally get good information from the people at the local IRS offices, but during the height of the tax season the taxpayer assistance staff is augmented by part-time and temporary help with limited training.

Keep in mind that the government is not bound by the advice you receive at its own offices. If your return is audited, citing advice from an IRS employe will not get you off the hook if it turns out that the advice was wrong.

Should you decide to use a professional tax preparer, you have a pretty wide choice. Local tax preparation offices pop up every January in homes, offices and stores.

Be careful in your selection. Just about anyone can hang up a shingle as a tax preparer. There are no federal or state rules establishing standards of training or experience. Your best guide may be a recommendation from a friend or neighbor.

An independent preparer might be anyone who has read a tax book or taken a short course in tax preparation. Or he or she might be a highly skilled accountant who works for the government or private industry and moonlights for a few months for the extra income.

The large chain operations generally give good service at low cost if you have a fairly routine tax situation. As a rule, however, the storefront offices are not geared to handle a complex return or an unusual situation. Some of the chains offer an executive service, often in your own home of office, for more complicated returns.

If you think an independent preparer or chain can't handle your return, you can go to a public accounting firm or a tax attorney. As you might expect, their fees generally are higher than the fees of commercial preparers.

Tax preparers who are neither attorneys nor certified public accountants may take a comprehensive examination given by the IRS, and those who pass the exam are known as enrolled agents.

An enrolled agent may not have a broad background in general accounting or law, but usually is competent in tax matters and in fact may be more knowledgeable than an attorney or CPA whose areas of specialization lie elsewhere.

Whatever level of professional assistance you select, be sure the preparer (or parent firm) will be around all year to assist in answering queries from the IRS. Many of the local operations disappear on April 15.

Despite frequent expert statements to the contrary, whoever prepared your return may accompany you or even represent you at an IRS audit. But only a CPA, attorney or enrolled agent may represent you at the higher appeal levels of the IRS or in the tax courts.

Regardless of the qualifications of the preparer or the size of the fee, you have full and final responsibility for the accuracy and legality of your return. Be sure you understand and agree with every word and number on it.

A qualified preparer should be familiar with many tax avoidance techniques for legally reducing your tax liability. But tax evasion, the reduction of taxes by deliberate misstatement or omission, is against the law. So stay away from anyone who tries to tell you what you can get away with, or who promises a refund before examining your tax information.

If the person who prepares the return cannot or will not answer your questions or explain the entries, go elsewhere. Never sign a blank tax return or one that has been filled out in pencil.

Anyone who prepares the tax return for another for pay must sign the return and enter an identification or Social Security number. The preparer must give you a copy of the return at the same time the original is presented for your signature.

Be wary of a preparer whose fee is based on a percentage of your refund or of the tax savings found for you. The fee should be based on the complexity of the return and the time it takes to prepare it. Who must file

Liability for filing a federal income tax return generally is determined by a combination of total taxable income, age and marital status. The rules for 1982 are unchanged from 1981.

Filing minimums for the various categories of taxpayers and the normal number of personal exemptions, each worth $1,000, for each category are shown in the accompanying table. Who must file

Liability for filing a federal income tax return generally is determined by a combination of total taxable income, age and marital status. The rules for 1982 are unchanged from 1981.

Filing minimums for the various categories of taxpayers and the normal number of personal exemptions, each worth $1,000, for each category are shown in the accompanying table. Who must file

Liability for filing a federal income tax return generally is determined by a combination of total taxable income, age and marital status. The rules for 1982 are unchanged from 1981.

Filing minimums for the various categories of taxpayers and the normal number of personal exemptions, each worth $1,000, for each category are shown in the accompanying table. Special rules

You must file a return regardless of tax liability or income:

* To claim a refund of income tax withheld from your pay.

* If you are entitled to a refund as a result of the earned income credit.

* If you are eligible to be claimed as a dependent on your parent's return and you had taxable interest, dividends or other unearned income of $1,000 or more.

* If you had net income of $400 or more from self-employment. 'Which form?'

For 1982 you have a choice of three income tax forms. Deciding on the right one for your situation may be a little more complicated than last year when there were only two, but the new Form 1040EZ will simplify the tax preparation chore for a lot of people.

Aside from the name and address block and the space for your signature, Form 1040EZ has just 11 lines for data, and one of those, the personal exemption, has the correct $1,000 amount already entered.

The instructions for completing 1040EZ are printed right on the back of the form. However, the 1040EZ will be included as a part of the 1040A booklet because of the need to use the booklet tax tables and the worksheet for figuring the deduction for charitable contributions. In addition, the IRS wants to offer last year's 1040A filers a choice between the 1040A and the new 1040EZ this year.

Only a single taxpayer who does not claim an additional personal exemption for age or blindness may use Form 1040EZ. Your taxable income must be less than $50,000 and be derived only from wages, salary and tips plus interest income of $400 or less.

If you're married, age 65 or older, blind, claim any dependents, have taxable income of $50,000 or more, have taxable income from any source other than wages and up to $400 of interest or you want to itemize deductions, you can't use 1040EZ and must go to either Form 1040A or the basic 1040.

The rules for using Form 1040A are unchanged from last year, but major graphics changes and rewritten line instructions have made the form easier to use.

If you are not eligible to use the 1040EZ for any reason, you should use Form 1040A if you meet these principal requirements:

* Your 1982 taxable income was less than $50,000.

* Your income consisted only of wages or other employe earnings, interest and dividends in any amount and unemployment compensation.

* You use the zero bracket amount and do not itemize deductions.

If you don't meet all three of these criteria you must use Form 1040. The long form is also required if you claim any adjustments to income such as moving expenses, an IRA or Keogh investment, alimony payments or a disability exclusion.

Form 1040 is mandatory if you are entitled to the credit for the elderly, for child or dependent care expenses or for residential energy expenditures.

But you can claim the tax credit for political contributions and the earned income credit on Form 1040A, as well as a limited deduction for charitable contributions and the new "marriage penalty" deduction allowed for a two-earner couple.

Form 1040 must be used if you compute your tax liability by five-year income averaging or use the 10-year averaging method for a lump sum pension distribution, if you paid estimated tax for 1982 or wish to apply part or all of any 1982 refund to your 1983 tax liability, or if you are filing a late return after requesting an extension on Form 4868.

Finally, you must use Form 1040 if you may be claimed as a dependent on your parent's return, had $1,000 or more in unearned income and had earned income of less than $2,300 ($1,700 if married filing separately) or if you file as a qualifying widow or widower. The short form syndrome

You should use the simplest form of the three that matches your tax situation. Any taxpayer who wishes may use Form 1040, but given the same facts, your tax will be the same regardless of the form used.

The progressively simpler Forms 1040A and 1040EZ make the job easier and reduce the possibility of error by reducing the number of line entries to be made.

On the other hand, don't let their relative simplicity con you into using either short form if the 1040 will save you money. Don't pass up what might be a substantial tax reduction because you're intimidated by the long form.

If you qualify for either the 1040A or EZ, or both, use spare copies of the various forms, including the basic 1040, and make a quick pass with approximate figures to see which form gives you the lowest tax. Put down that pencil

Before you turn on your calculator and put pencil to paper, take a little time to sort and review all the bits and pieces of information you have been collecting all year.

Separate your records into various categories. On the income side you may have W-2s for wages or salary from your employer; 1099s for interest from banks, S&Ls, credit unions and your insurance company; dividend statements for corporate stock and mutual funds; information returns from a limited partnership or small business corporation; and perhaps distribution statements from an estate or trust.

On the other side of the ledger you may have receipts, canceled checks or memos for such things as child care expenses, contributions to an IRA or Keogh plan, moving expenses, political contributions, energy expenditures and the various Schedule A deductions.

After you have all the pieces of paper sorted out, take a few minutes to thumb through your checkbook stubs and any budget records you keep for deductions you may have missed.

Then, if you've started early enough and time is on your side, you may want to wait a couple of days before starting on the actual preparation of the return. Your subconscious mind may just dredge up some major item of perhaps a year ago that you had completely overlooked.

Only then, when you're satisfied that you have all the pertinent items of information sorted and available, are you ready to pick up the pencil and begin to work. Your filing status

Your filing category is determined by marital status, household living arrangements and the people who are dependent on you for support.

Picking the right category is not simply a matter of checking a box at the top of the return. Your filing category determines which column to use in the tax tables or which tax rate schedule to use, and of course, it affects the amount of your tax.

Your marital status on Dec. 31, 1982 is the determinant for income tax purposes. That is, if you were married on that date, you are considered to have been married for the entire year, and you may file a joint return. If you were unmarried on that date--either single, divorced or legally separated--then you are considered to have been single for all of 1982. If you were married:

* You may elect to file separate returns even if you were married, but most couples will pay less tax if they file a joint return. In only a few cases--usually when both husband and wife have substantial independent incomes or when one spouse has large medical bills--will separate returns be the better method. You must file a joint return to take advantage of the new marriage tax penalty exclusion.

If you do file separate returns, you must both use the same method for computing the tax. That is, if one itemizes deductions, the other must also itemize and may not use the zero bracket amount.

* If you and your spouse were living apart but were not legally separated, you may still file a joint return. This may result in a lower combined tax then filing separately, but each of you is then individually responsible for the entire tax.

* If you were married but living apart from your husband or wife for the entire year, you may file as a single individual if you paid more than half the cost of maintaining your home during 1982 and your home was also the principal home of your dependent child for more than six months of the year. Filing as single will generally produce a lower tax than the married filing separately category. If you were recently widowed:

If your husband or wife died during 1982 and you had not remarried by Dec. 31, you may file a joint return and claim the exemption for your deceased spouse. Sign the return ourself, then enter "surviving spouse" under your signature. Write the date of your spouse's death in the name and address space at the top of the form.

Do not send a copy of the will or death certificate with the return. But if anyone other than the surviving spouse files for the deceased and claims a refund, Form 1310 must accompany the return to document the right to the refund.

* If an executor or administrator has been appointed for the estate, he or she may have filed--or may intend to file--a separate "final return." In any case the estate tax return, if one is required, is likely to have an impact on your income tax return. If the executor is not a professional, you may need help in this situation.

* If your husband or wife died during 1980 or 1981 and you had not remarried by the end of 1982, you may be eligible to file as a "qualifying widow(er)" if you meet all three of these tests:

* You were eligible to file a joint return in the year of your spouse's death, whether you actually filed that way or not.

* Your home was the main home during 1982 of a child whom you claim as a dependent.

* You paid more than half the cost of maintaining that home for the entire year.

If you qualify, use the joint return tax rates, but do not claim a personal exemption for your deceased husband or wife. The personal exemption can only be taken if death occurred in 1982. If you were single:

If you were not married on Dec. 31, you generally must file as a single person. However, you may qualify for filing as head of a household and enjoy the lower tax rates that go with that status if you meet any one of these tests:

* You paid more than half the expense of maintaining your home that was also the principal home all year of your unmarried child, stepchild, foster child or grandchild, whether the child qualified as your dependent.

* You paid more than half the cost of upkeep for your home that was also the principal home of any other relative you claim as a dependent (but not a dependent under a mutual support agreement).

* You paid more than half the cost of maintaining a home that was the principal home of your dependent mother or father even if you didn't live in it yourself. Person exemptions

Each taxpayer is allowed a single personal exemption, which eventually is translated into a $1,000 income exclusion on the tax return.

In addition to this basic personal exemption, a person who is 65 or older or legally blind may claim an extra $1,000 exemption. If your 65th birthday was Jan. 1, 1983 you may take the extra exemption on your 1982 return.

The additional exemptions for age and blindness are available only to the filing taxpayer or both taxpayers on a joint return. They may not be claimed for a dependent. Exemption for dependents

For a dependent to be claimed on your tax return, the dependent must meet five tests.

* Citizenship or residency test. A dependent must either be a U.S. citizen or have resided in the United States, Canada or Mexico during 1982. This test is waived for an alien child adopted by and living with a U.S. citizen in a foreign country.

* Relationship/member of household test. A relative (as defined in the instruction booklet) need not have lived in your home to qualify as a dependent.

If you file a joint return, a dependent meets this test if related to either spouse. Once a qualifying relationship is established, it doens't end because of death or divorce. For example, if he meets the other tests you may claim your former father-in-law as a dependent even if your wife has died and you have remarried.

A dependent who is not related must have lived in your home for the entire year. But absence at school or for medical reasons is not disqualifying if your home was the dependent's home when not away.

* Income test. To qualify, a dependent must have received less than $1,000 in taxable income during 1982. Do not count income not subject to tax, such as bona fide gifts, Social Security payments, interest on tax-exempt securities or nontaxable scholarships.

The income test is waived for a child who was under the age of 19 on Dec. 31 or who was a full-time student, regardless of age, during any five months of the year.

* Support test. To claim an exemption for a dependent, you must have provided more than half of his support during 1982. Unlike the income test, all income of the dependent (except scholarships), whether taxable or not, must be considered in determining how much the dependent contributed to his own support.

However, only income that was actually spent by the dependent on items of support--necessary living expenses and capital items such as a car or TV set--need be included in the calculation.

Do not count as support any money your dependent deposited in a savings account unless he withdrew it later in 1982 and spent it on support. Money paid for life insurance premiums, income tax or Social Security payments by the dependent should also be excluded.

Count as a part of your contributions to support such basic living expenses as lodging, food, clothing, medical care and education, as well as capital items bought for the dependent's own use (but not items bought for the entire household).

If the dependent lived in your home, count the fair market value of the lodging provided, but only the actual cost of food or other support elements.

If you provided separate living quarters such as an apartment for an elderly relative, count the cost to you of that housing. But if your parents lived rent-free in a house you owned, use the fair market value based on comparable housing rather than the cost.

* Joint return test. Normally a married person who files a joint return with his or her spouse may not be claimed as a dependent by another taxpayer, except in the case of a joint return filed solely to obtain a refund of taxes withheld.

However, you may claim an exemption for a married dependent who meets the other tests if the dependent's spouse files a separate return and doesn't claim an exemption for your dependent.

* Divorced parents. As a general rule, a divorced parent who had custody of a child for the greater part of the year may claim the child as a dependent. But the other parent may take the exemption if the divorce decree or separation agreement says so and he or she contributed $600 or more to the child's support during 1982.

In the absence of a specification in the agreement, the noncustodial parent may still claim the exemption if he or she provided at least $1,200 for support and the parent having custody can't prove a larger contribution to the child's support.

* Joint support. Several taxpayers may jointly support a dependent (brothers and sisters caring for a parent, for example) with no single person contributing more than half of the total support.

If together you contributed more than half the support and the dependent otherwise qualifies, one of the group may take the exemption if he or she provided at least 10 percent of the total support and the others agree to waive their claims.

Each year a different taxpayer may claim the exemption, so it may be rotated among the several contributors from year to year. The taxpayer claiming the exemption must attach to the return a separate Form 2120 (agreeing to the arrangement) from each qualified contributor. Reporting your income

In order to determine your tax liability, you must first determine the amount of your income that is subject to tax.

* Nontaxable income. Not all income is taxable, so the first step should be to pull out those income items to be excluded from the income you report on the tax return. Here are the major kinds of income that should not be reported on your federal return. (State requirements may be different.)

* Social Security benefits.

* Veterans Administration payments.

* Disability retirement pay from the armed forces.

* Workman's compensation payments for injury or illness.

* Interest on state or municipal bonds and spcified dividends from tax-free mutual funds and unit trusts.

* Interest or dividends accumulating in a Keogh or IRA account, a deferred or tax-sheltered annuity or a simplified employe pension plan.

* Dividends on a life insurance policy, unless the accumulated total exceeds total premiums paid.

* Proceeds from a life insurance policy received because of the death of the insured. (See note below.)

* Gifts or bequests.

* Military allowances and certain cost-of-living allowances for U.S. civilian employes overseas.

* Child support payments.

* Amounts received in a civil suit as damages.

Note: Life insurance proceeds received in the form of periodic payments generally includes some interest in addition to the insurance principal. The interest component is taxable income. But if you're a surviving spouse receiving installment payments of insurance proceeds after the death of your husband or wife, up to $1,000 a year of this interst income may be excludable. See IRS Publication 525.

* Taxable income. All taxable income must be included in the total income reported on your return. But different kinds of taxable income are reported in different ways.

The table, Reporting Your Income, lists the principal types of taxable income and tells you where to report each type on each of the three tax forms.

Here are some special considerations to keep in mind when working on the various kinds of income. All-Savers certificates

Although tax-free, interest earned in 1982 on all All-Savers certificates must be reported in full. It is then balanced against the allowable exclusion, reduced by any interest reported in 1981, to determine if any part of the All-Savers interest is in fact taxable. The maximum lifetime exclusion is $2,000 for joint filers, $1,000 for all others. You must report and pay tax on all interest you received on an All-Savers certificates redeemed before maturity. Dividend income

Up to $100 of qualifying dividend income may be excluded. The exclusion doubles to $200 on a joint return, regardless of which spouse owns the shares. Utility stock dividends

Up to $750 a year ($1,500 on a joint return) of dividends from many utility companies may be excluded from taxable income if the dividend proceeds had been invested in additional shares under a qualifying company reinvestment plan.

You must account for these dividends, and may not simply omit them from your return. Instead, include the amount of the divident on line 9 of Schedule B, and write DR, for dividend reinvested, next to the payer's name. Then enter the amount to be excluded on line 13, where it eventually gets deducted from taxable dividends. Business income

If your net income from self-employment was $400 or more, you must file Schedule SE to determine if any Social Security tax is due. Annuity income

If your pension or annuity is partially taxable, use the worksheet in the instruction booklet to calculate the taxable portion. Schedule E is no longer used for this purpose. Rental income

Rental of your property to a relative will now qualify for all the normal investment property deductions (including depreciation) if the rental is at fair market value and the relative uses the property as the principal residence. Capital gain dividends

These are normally reported on Schedule D, but if Schedule D is not otherwide needed, report 40 percent of total capital gain dividends on line 14 of Form 1040. Barter income

If you engaged in barter transactions, either independently or as a member of an organized barter exchange, you must report the fair market value of goods or services received from others in return for your own. Unemployment compensation

The income ceiling above which unemployment compensation becomes taxable has been lowered for 1982, from $20,000 to $12,000 for a single taxpayer and from $25,000 to $18,000 on a joint return. Use the worksheet in the instruction booklet. State tax refund

A state or local income tax refund received in 1982 from a prior year's return should not be reported as income if you didn't itemize deductions and claim the tax paid in that earlier year. Gambling

Gambling winnings must be reported in full; losses may not be offset directly against winnings. Instead, losses should be claimed as a miscellaneous deduction on Schedule A, but only to the extent of winnings reported.

If you want more information about any category of income, check out the IRS publication shown in the table. These are all available either by mail, using the order blank in your tax package, or in person at many IRS offices--and they're free. Income adjustments

After you have added up your income, you should check to see if you qualify for any adjustments to income. These adjustments reduce the amount of income on which you pay tax. They may be claimed regardless of whether you itemize deductions or take the zero bracket amount.

The table headed Reporting Adjustments lists the various adjustments to income, tells you where to enter each item and identifies the IRS publication to see for more information than is provided in these explanations. Moving expenses

If you changed your residence during 1982 to work at a new location, either for the same or a different employer, you may deduct all or part of the expenses of the move. Two requirements must be met:

* The distance between your old residence and your new place of employment must be at least 35 miles greater than the distance between your old residence and your former job.

* You must work in the new area, though not necessarily for the same employer, for at least 39 weeks in the 12-month period after the move. If self-employed, you must conduct your business full-time for at least 39 weeks in the first 12 months and a total of 78 weeks during the 24 months after the move.

The second test is waived if termination of employment is due to death or disability, transfer for the employer's benefit or discharge (other than for willful misconduct).

If you meet both tests, you can deduct from gross income several kinds of moving expenses.

The cost of direct travel from the old to the new residence for you and your family--transportation, meals and lodging--may be deducted. But do not claim any expesnes for sightseeing or to visit family or friends en route.

If you go by car you may use either out-of-pocket expenses for gas, oil and repairs, or a flat nine cents a mile. In either case you may add tolls and parking fees.

The cost of moving your household, including packing and crating, insurance and any necessary storage, is deductible, but charges for connecting appliances or refitting carpets or draperies are not.

Subject to dollar limits, you may deduct the cost of travel, meals and lodging for househunting trips before the move but after getting the new job. You may also include the cost of meals and lodging for up to 30 days if you had to stay in temporary quarters after moving to the new area.

Finally, you may count the costs associated with selling your old residence and buying a new hone, including such expenses as broker commissions and legal fees, but not a loss on the sale.

If you're in this situation, you have a choice. Some of the selling costs on the old house may be deducted as either a moving expense or a cost related to the sale.

If you choose the latter, you will reduce your capital gain on the sale, but you may be deferring tax on the gain by buying a new home. In any case, only 40 percent of the gain is taxable income, assuming you owned the home for longer than a year.

By claiming these costs as a moving expense (to the extent allowable) you get the benefit of a 100 percent deduction from income. And any balance over the ceiling on this type of moving expense may still be applied against the sale transaction.

If you were reimbursed for any moving expenses by your employer, you must subtract the amount of the reimbursement. Claim the total expense without reduction if your employer included the reimbursement as income on your Form W-2. Employe expenses

An outside salesperson, one who sells away from the employer's place of business, may deduct all ordinary and necessary business expenses from gross income.

Most unreimbursed expenses of an employe who is not an outside salesperson may be claimed only as itemized deductions on Schedule A. But certain business travel and transportation expenses may be deducted as an adjustment even if you do not itemize.

If you traveled away from home overnight or longer on business, deduct the costs of transportation (to and from your destination plus local travel while there), meals, lodging and reasonable incidentals such as tips.

The cost of commuting between your home and work is not normally deductible. But if you worked at two or more different places on the same day, for either the same or different employers, you may deduct the cost of getting from one job to another.

If you used your car you may deduct the calculated cost of gas, oil, repairs and maintenance, insurance, registration and depreciation. If you used the same vehicle for both busness and personal reasons, you must allocate the cost proportionately.

If you elect actual expenses for an auto purchased in 1981 or 1982, you must use the new Accelerated Cost Recovery System (ACRS) to compute the depreciation. ACRS does not apply to cars used for business before Jan. 1, 1981.

You can avoid complicated record-keeping by simply keeping track of business mileage. Keep a small diary or memo book in the glove compartment of the car. You can then take a deduction of 20 cents a mile for the first 15,000 miles of business use plus 11 cents for each mile over that amount. (There is no change from the 1981 allowance.)

If you use the optional method, your mileage deduction is limited to 11 cents a mile for all travel after the car has been fully depreciated. A car placed in service after 1979 for which the optional mileage rate has been claimed is considered fully depreciated after 60,000 miles of travel has been claimed at the standard rate.

In adding up the annual mileage to reach the 60,000 figure, count the actual business miles driven each year but only up to an annual ceiling of 15,000 miles. That's because a reduced rate of 11 cents a mile is used for miles above 15,000 each year rather than the standard 20 cents.

Whether you use the actual expense method or the optional mileage rate, tolls and parking fees related to business use may be added. But fines for traffic violations may not be claimed in either case.

The standard of reasonableness governing deductions for attending domestic conventions and business meetings is unchanged from the 1981 rules.

But the two-a-year limit on deducting expenses for foreign conventions has been eliminated. The new rule requires only that it be as reasonable for the meeting or convention to be held outside the United States as inside. Last year's ban against claiming cruise-ship conventions was affirmed, but beginning in 1983, conventions on U.S. flagships may qualify. IRA and Keogh deductions

If you have earned income, you may claim an adjustment on your tax return for contributions to an IRA for up to 100 percent of that income but not more than $2,000.

On a joint return with one spouse having no earnings, the total increases to $2,250, divided between two separate accounts with no more than $2,000 in either account.

Keogh and Simplified Employe Pension Plan ceilings were doubled for 1982, from $7,500 to $15,000. However, the limitation of 15 percent of earnings still applies.

You may open an IRA account and make payments as late as April 15, 1983 and still claim the deduction on your 1982 tax return.

The same cutoff date applies for payments into a Keogh plan, but the account must have been established with at least a token payment by Dec. 31, 1982. Alimony payments

Periodic alimony or separate maintenance payments to a former spouse required by a decree of divorce or of separate maintenance, a decree of support or a written separation agreement may be deducted as an adjustment to income.

Payments specifically designated as support for a minor child are not deductible, even if they are paid to your former spouse rather than directly to the child. (Such payments may be a factor in determining who may take the dependent exemption for the child.) Marriage tax penalty

For the first time, two-earner married couples are given an adjustment to compensate for the anomaly which saw them paying higher taxes than if they had been single with the same individual incomes.

To qualify, you must file a joint return and both spouses must have "earned" income--that is, salary or wages, tips, commissions or net earnings from self-employment.

The amount of earned income must be reduced by any work-related deductions such as employe business expenses and payments into an IRA or Keogh plan.

The adjustment allowed is equal to five percent of the net earned income of whichever spouse earned less, up to a maximum of $1,500--five percent of an earnings ceiling of $30,000. (Starting in 1983, the percentage goes up to 10 percent and the adjustment lid to $3,000.)

The amount of the adjustment is computed on Schedule W, a simple eight-line form, and is then carried to Form 1040 or 1040A. Attach Schedule W to your tax return to show the calculations.

(Since Form 1040EZ is for single taxpayers only, the marriage tax adjustment may not be clalimed on that form.) Disability

The disability exclusion provides for a maximum annual exclusion of $5,200, if you were retired for permanent total disability and had not reached age 65 by Dec. 31, 1982.

Exception: You are eligible if you were under 65, had retired for any degree of disability and were permanently and totally disabled on Jan. 1 of either 1976 or 1977.

The disability exclusion is limited by an income ceiling. If you qualify, use Form 2440 to determine the amount of any authorized exclusion. You may be better off to waive the disability exclusion, however, and to treat the payments as a pension.

Veterans Administration payments for disability continue to be excluded from gross income. Military disability pensions and disability retirement pay are also exempt from tax if you were in the military service on or prior to Sept. 24, 1975. Early CD withdrawal

If you redeemed a certificate of deposit before its maturity date, you were probably assessed an interest penalty which the savings institution withheld from the proceeds.

Do not subtract the penalty from interest earned. Instead, report the full amount of interest income as stated on the Form 1099-INT provided to you by the issuer.

Then enter the amount of the interest penalty on line 27 of Form 1040, where it is combined with other adjustments and then subtracted from gross income.

If you are reporting an early withdrawal penalty you may not use either 1040A or the new 1040EZ. Special charity deduction

If you itemize deductions, you should list all qualifying contributions to religious, charitable and educational institutions on Schedule A, as you have in the past.

A taxpayer who does not itemize may claim a special reduction of income for a part of his contributions--a small break this year but one scheduled to grow.

The special adjustment for 1982 is limited to a maximum of $25, equal to 25 percent of your donations up to a $100 ceiling. Both the percentage and the ceiling go up in later years.

This partial credit for charitable contributions is available to all taxpayers regardless of which of the three tax forms is used. Your deductions

For most people, the decision on whether to itemize deductions or to take the zero bracket amount (ZBA) is a relatively simple one. If the total amount you can claim by itemizing is greater than your ZBA, you should itemize. If the total is less, use the ZBA.

For 1982, the ZBA remains unchanged from last year:

* $3,400 if you are married filing jointly or a qualifying widow(er) with a dependent child.

* $2,300 if you are filing as a single person or an unmarried head of household.

* $1,700 if you are married filing separately.

The tax tables and tax rate schedules already incorporate the proper ZBA deduction, so you have no calculations to make if you use the ZBA. If you itemize deductions, a special computation is required after you have entered your various deductions on Schedule A.

After adding all the itemized deductions on line 28, you must subtract from the total the ZBA for your filing status. The remaining amount (on line 30) is the figure to be carried to line 34a of Form 1040, rather than your total deductions. Medical expense

As a general rule, medical expenses may be deducted only to the extent that the total exceeds 3 percent of adjusted gross income. Expenses for drugs and medicine are further limited: You must first subtract 1 percent of adjusted gross income, then include only the remaining balance with other medical costs.

There is one exception. Half of medical insurance premiums up to a maximum of $150 may be deducted without regard to the 3 percent limitation. The mechanics of the computations are different this year (although the end result is the same), so follow the line-by-line instructions on Schedule A carefully.

(Note: Beginning in 1983, the 3 percent floor goes up to 5 percent. At the same time, the separate deduction for up to $150 in medical insurance premiums is eliminated; all premium payments will go in with other medical expenses.

(Starting in 1984, the separate exclusion of 1 percent of adjusted gross income for drug costs will end. But the rules on what may be included will be tightened to count only prescription medicines and insulin. Over-the-counter preparations, even when medically indicated, will not qualify.)

You may count your own medical expenses plus those paid by you on behalf of all dependents claimed on your return, including a dependent you claim under a multiple support agreement.

You may also claim medical expenses you paid for a person you would have been permitted to claim as a dependent except that he or she had taxable income of $1,000 or more or is filing a joint return.

Medical expense includes all payments you make to medical practitioners such as physicians, dentists, osteopaths, nurses and pharmacists and to organizations such as hospitals, clinics, emergency centers, testing laboratories and ambulance services.

A fee for acupuncture treatments by a qualified practitioner is a medical expense. The cost of a legal abortion or procedure for sterilization is deductible, but illegal drugs or any treatment that is against the law may not be included.

Count the cost of prosthetics such as false teeth, hearing aids and batteries, glasses and contact lenses; orthopedic shoes, crutches and similar aids; purchase or rental of special equipment for the handicapped, and the cost of a guide dog for the blind or hearing-impaired.

You may deduct the cost of transportation to obtain medical care, including bus, taxi, train or plane fare, or nine cents a mile plus tolls and parking fees if you use your car. Expenses of a parent traveling with a child or of a nurse accompanying a patient may also be claimed. Taxes

Various types of state and local taxes may be deducted on Schedule A.

* State and local income taxes actually paid or withheld from wages during 1982, whether more or less than your final tax bill. (If you received a refund in 1982 for a previous year, the amount of the refund should be entered as income on line 10 of Form 1040, but only if you itemized deductions for the year it was paid.)

* Personal property taxes paid in 1982, regardless of the year to which they applied.

* Real estate taxes paid in 1982 on your home or other property you own. (Taxes paid on property held for rental to others go on Schedule E rather than Schedule A.)

If the financial institution that holds your mortgage pays the real estate tax, deduct only the amount paid on your behalf during 1982, not the monthly tax payments you made into the escrow account.

* General sales tax, either the amount allowed in the table in the IRS instruction booklet or the total actually paid if you kept a record.

In addition to the amount authorized by the table, you may claim sales tax paid on a major purchase like a car, boat or trailer. As a reminder, line 13b on Schedule A is provided for the additional allowance for a motor vehicle.

If, like most people, you use the sales tax table in the booklet, don't automatically look up the figure for your adjusted gross income. Instead, add to AGI all nontaxable income like Social Security and municipal bond interest to get the true income figure, which should be used in looking up the tax allowance on the table. Then, in the "Taxes" box on Schedule A, write "Includes $--nontaxed income," including the dollar amount, to explain the seeming discrepancy.

Not deductible: excise taxes on liquor, cigarettes, gasoline, utility bills or transportation; hunting or fishing licenses; car tags or driver licenses; traffic fines, or penalties for underpayment of federal or state income tax. Interest expense

You may deduct interest paid on a mortgage on your home or other non-investment property; on a personal loan; on a life-insurance loan if paid in cash, but not if added to the loan; on charge accounts; and on late federal or state tax returns.

Interest paid on money borrowed to buy tax-exempt bonds or single-premium life insurance is not an authorized deduction. And there is a ceiling on the deduction for interest paid in connection with investments. See IRS Publication 550 for details.

Prepaid or discounted interest may not be deducted when paid if the loan extends beyond the 1982 tax year. Instead, the interest cost must be apportioned over the life of the loan. (If the loan document doesn't specify and you don't know how much of each payment is interest, divide the total amount of interest charges evenly over the scheduled number of payments.)

The amount of any "points" paid by you in connection with purchase of a home normally is considered interest. But if you sold your home, points you paid to induce a lender to provide financing to the buyer (mortgage "buy-down") is not interest. The amount you paid, however, is a selling expense that may be used to reduce any profit on the sale.

On the other hand, a prepayment penalty you as the seller had to pay to your mortgagee for early repayment of a mortgage is deductible as interest in the year paid.

If you bought a home with "creative financing" that provided you with a mortgage on which the state interest rate was less than 9 percent (including zero interest), you are entitled to a 9 percent Schedule A deduction for what the IRS calls "imputed" interest. Contributions

A comprehensive list of the types of religious, charitable and educational organizations that qualify for Schedule A deductions is found in the instruction booklet, along with the major kinds of contributions that may not be claimed.

In addition to cash contributions, you may deduct the fair market value of property given to qualifying organizations. But there are restrictions. If the information in the instruction booklet is not adequate, see Publication 526.

Unreimbursed expenses incurred while donating personal services to a qualifying organization are deductible, including postage and phone calls, meals while contributing your services and the purchase and upkeep of specialized uniforms not suitable for general wear.

You may also deduct local transportation expenses (nine cents a mile if you use your car) and the cost of travel to attend a convention as an official delegate of a qualifying organization, including meals and lodging if away from home overnight.

But you may not deduct the value of your contributed services even if you are normally paid for the same type of work. Similarly, the value of temporary use of your property is not deductible even if it is normally rented for income. Casualty losses

The destruction of or damage to nonbusiness property resulting from a sudden, unexpected or unusual event may provide a tax deduction.

Gradual deterioration such as a termite infestation doesn't qualify, nor does preventive action such as removing a dead tree before it falls. The event must occur suddenly, as in the case of a hurricane, tornado, earthquake or flood, fire, theft, vandalism or accident.

Only the unreimbursed loss is deductible. Any amount recovered from insurance or from another individual must be subtracted from the total loss. In addition, the first $100 of net loss from each separate event must be deducted.

This year, a one-line entry (line 24) is provided on Schedule A for casualty losses. Use Form 4684 to describe the details of each loss, including the $100 exclusion and any insurance reimbursement.

(Note: Beginning in 1983, a casualty-loss deduction will be allowed only to the extent that the total amount for all losses, after deducting the $100-per-event exclusion, exceeds 10 percent of adjusted gross income.) Employe deductions

Certain business expenses may be taken in the "miscellaneous" section of Schedule A if they were incurred in the course of your employment and you were not reimbursed by your employer.

These include entertainment expenses, professional societies and publications, union dues, small tools and supplies, cost and upkeep of specialized uniforms not suitable for wear away from work and protective clothing like hard hats and safety shoes.

If your employer requires that you have a physical examination and doesn't reimburse you for the cost, it may be claimed as an employe expense. This may be a better deal than including it as a medical deduction, since it is not subject to the 3 percent exclusion rule.

Expenses related to job-hunting may be deducted even if the search was unsuccessful. You may not claim the cost of a certifying examination or a license to practice, but these may be included as business expenses on Schedule C if you were already in business.

Military people on active duty may not deduct the cost of regular uniforms, but may claim items such as insignia and ribbons and both the original cost and maintenance of work clothing that may not be worn off duty. Reservists and guardsmen not on active duty may deduct the unreimbursed cost of all uniforms.

Unreimbursed education expenses related to your work are deductible on Schedule A--other than transportation, which may be claimed as an adjustment to income even if you don't itemize.

The education must have been taken to meet the requirements of your employer or of the law to keep your present job, or to maintain or improve your skills in that job. Education to qualify for a job initially, to train for a new profession or for your own pleasure does not qualify. Home office

If you are self-employed and use a part of your home for business, you may deduct certain expenses if the space used meets these two tests:

* The area must be used exclusively for business.

* It must be regularly used by clients or customers or be the principal place for operating the business for which you claim the deduction.

Prior to 1981 tax returns, you could claim the deduction only if you engaged in your principal occupation in that office at home. Now, however, the space qualifies if used for a secondary or part-time occupation also, if the two tests above are met.

(Note: This change was made retroactive. If you did not claim expenses for an office at home because of the requirement that it be for your principal occupation, you can now file amended returns for tax years 1979, 1980 and 1981. Use Form 1040X to claim the deduction and a refund of taxes paid for those years.)

If you are an employe rather than self-employed, there is a third requirement: Use of space in your home must be for the convenience of the employer, not for your own convenience.

If the space qualifies, you may deduct expenses directly attributable to its use for business (desk, telephone, filing cabinet) plus a proportional share of general home expenses, such as light and heat.

The deduction for an office in the home may not be used to shelter other income from tax. The total amount of the deduction for expenses (after subtracting the allocable portion of property taxes and mortgage interest, if you own your home) may not exceed net income from business use. Adoption expenses

A miscellaneous deduction is allowed for up to $1,500 of expenses in connection with adoption of a "child with special needs."

A child with special needs is one who has been so designated under the laws of your state and who is eligible for adoption assistance payments under the Social Security Act.

Qualifying expenses include adoption fees, court costs and attorney fees. Total expenses must be reduced by any reimbursement received under a federal, state or local government program.

Adoption assistance payments from Social Security are considered "maintenance payments" rather than expense reimbursements, and need not be counted as an offset. Other deductions

In general, you may claim any personal expense related to the production of taxable income. For example, include the cost of a safety deposit box if it held stocks or corporate bonds or the deed to rental property, but not if it contained only personal papers or tax-free bonds.

Fees for investment advisory services and subscriptions to investment periodicals may be deducted even if you lost money on your investments. But travel or transportation expenses to attend a stockholder meeting are not deductible even if you own or contemplate buying shares in the company.

You may deduct fees paid to your bank or broker for the collection of taxable interest on notes or coupon bonds, but do not deduct brokerage commissions, which are added to the cost of securities when calculating capital gain or loss.

Legal fees associated with the production of taxable income, such as attempts to collect alimony or back wages, are deductible. Legal costs for a divorce proceeding are not deductible, but a separately identified fee for investment or tax counseling in connection with the divorce is a valid deduction.

Finally, don't forget to include a fee paid for having your personal tax return prepared, as well as the cost of any tax books and of trips to an IRS office for tax assistance. IRS tax computing

The IRS will figure your tax liability for you if you wish. All 1040A and 1040 EZ filers may request this service; 1040 filers qualify only if they meet specified conditions.

If you file on Form 1040EZ, you need only enter your name and address, Social Security number and the proper amounts for lines 1 through 8. (Line 6 has the correct $1,000 personal exemption already printed.) Sign and date the return, attach required W-2s and mail the package to the IRS.

Those using 1040A who want the IRS to compute their taxes must do a little more of their own work. After completing the identification information at the top of the form, you must indicate the number of personal and dependent exemptions claimed.

Then, the numbers for lines 1 through 17b must be entered, including such items as All-Savers interest, dividend income and any unemployment compensation. (If you received any of these you may not use Form 1040EZ.)

If you qualify for the two-earner deduction you must calculate the allowable adjustment. (Only single persons may use the 1040EZ.) And finally, you claim any credit for qualifying political contributions.

At that point you can drop down past the various tax calculations (including the earned income credit, which the IRS will compute if you're eligible) and sign and date the return at the bottom.

The IRS will also calculate your tax on Form 1040 if you meet all of the conditions described in the instruction booklet.

But if you have more than $50,000 adjusted gross income, itemize deductions or don't fit any of the other requirements specified, you'll have to determine your own tax liability.

If you request IRS computations on a joint return (on either 1040 or 1040A), show the income of each spouse separately. On the 1040A use the space on the left under the words "Step 3--Adjusted Gross Income," and identify the figures by "H" for husband and "W" for wife.

Use the same technique on Form 1040, but enter the two numbers in the left-hand space under "Adjustments to Income."

Regardless of which of the three forms you use, be sure to sign and date the return and to attach Copy B of all W-2 forms.

The IRS will then calculate your income tax liability, including--if you are eligible--the earned income credit. The IRS will then mail you a check for any refund due to you or a bill if you owe additional tax. Figuring your own tax

You may compute your own tax on any of the three filing forms. Use the tax table if your net taxable income is under $50,000, unless you figure your tax by income-averaging on Schedule G.

On all three forms, you must subtract the total dollar value of all personal and dependent exemptions (at $1,000 each) before going to the tax tables. But the zero bracket amount is already taken into account, so don't subtract the ZBA.

Of course, the table figures reflect the 1981 and 1982 tax reductions ordered by the Economic Recovery Tax Act of 1981.

If your income exceeds the table ceiling of $49,999 or you use Schedule G, you must calculate your tax liability from the appropriate tax rate schedule for your filing status.

Unlike last year, when tax-schedule users had to make a special reduction for the late 1981 tax cut, the new, lower rates are built into the schedules. The zero bracket amount is also considered in the dollar bracket figures.

High-income taxpayers will find the familiar Form 4726 is missing from the tax package this year. Form 4726 was used in the past to limit the tax on earned income to 50 percent. Unearned income like interest and dividends could be taxed at a rate as high as 70 percent.

Starting in 1982, the maximum tax on all income regardless of source is set at 50 percent. This new ceiling eliminates the need to differentiate between earned and unearned income, and thus also eliminates the need for Form 4726.

But the minimum tax survives, unchanged from 1981. The minimum tax was established in an attempt to prevent high-income taxpayers from sheltering so much of their income with special tax avoidance methods that they would end up paying little or no tax on large amounts of income.

The minimum tax is imposed on selected forms of income known as "tax preference" items. Tax-preference income includes stock options, certain types of accelerated depreciation and depletion, the excluded portion of net long-term capital gains (but not on sale of a residence) and itemized deductions, excluding medical expenses, state and local taxes and casualty losses, in excess of 60 percent of adjusted gross income.

Depending on the amount and source of tax preference items and the amount of your income, you may have to use either Form 4625 or Form 6251. See the instructions with these forms for details.

(Note: Starting in 1983, the minimum tax provisions have been expanded by adding new items to the list of tax preference income and by lowering the income floor at which the minimum tax is triggered.) Tax credits

After you have determined your initial tax liability, you get another shot at reducing your tax bill with various tax credits. Unlike adjustments and deductions, which reduce the amount of income on which tax is levied, a tax credit gives you dollar-for-dollar reduction of the tax itself.

The accompanying chart "Claiming Tax Credits" tells you where to enter each of the credits explained below. In addition, the applicable IRS publication is listed, should you want to do further research. Political contributions

You may claim as a tax credit half of your total qualifying political contributions. The ceiling on this credit is $100 on a joint return, $50 on all others.

To qualify, your contribution must have been made to a candidate for elective public office or to a newsletter fund or political action committee of a candidate or an elected public official.

The dollar checkoff on the tax return for a presidential election campaign is not a political contribution. Tax credit for the elderly

You may qualify for the tax credit for the elderly if you were 65 or older on Dec. 31, 1982, and you had taxable income of any kind during the year.

You start with an initial maximum allowance for your filing status. From this starting amount, you deduct certain kinds of pension and annuity payments not included in gross income (principally Social Security or Railroad Retirement act benefits).

Then there is a 50 percent offset for adjusted gross income above specified amounts shown on Schedule R. The tax credit is 15 percent of the amount remaining after these reductions.

There is a special tax credit for taxpayers under the age of 65 who are retired under a federal, state or local government retirement system.

The computations for this credit are similar to those for the regular credit for the elderly. But there is an additional offset, equal to the amount of earned income in excess of some fairly low minimums. Child and dependent care

For 1982 the credit for care of a child or other dependent was changed to a sliding scale related to income.

This new method provides a larger tax break for low-income families, with the size of the maximum credit decreasing as income increases. But all eligible families get at least as large a credit as last year.

Specifically, if your adjusted gross income (AGI) for 1982 was $10,000 or less, you may claim a tax credit equal to 30 percent of qualifying expenses up to the ceiling cited below. The rate is reduced one percentage point for each $2,000 (or fraction) of your AGI above $10,000.

When your AGI reaches $28,000, the credit levels out at 20 percent--the rate that applied last year to everyone--for all remaining taxpayers, with no income ceiling.

There are two qualifying requirements:

* The expenses must have been incurred for care of a child under age 15 or for a spouse or dependent who was unable to care for himself or herself.

* The care must have been provided to permit the taxpayer (both spouses in the case of a married couple) to be employed for pay. In some circumstances, as explained below, the credit is available to a couple even if only one spouse was employed.

The ceiling on eligible expenses is $2,400 for care of one qualifying individual, $4,800 for two or more. Since the percentage changes, the credit ceiling varies with your income. The following table should help you figure out how much of a credit you may claim.

Regardless of your marital status, you must have maintained a home of your own during 1982, and the qualifying individual for whose care you claim the credit must have been a member of your household.

The credit is normally allowed only for care in the home paid for during 1982. But care outside the home, like a nursery or camp environment, may also qualify in the case of a dependent child under age 15.

If you are married, you must file a joint return to claim the credit. However, you may file a separate return and still be eligible if you meet these tests:

* You were legally separated or living apart from your husband or wife.

* You paid more than half the cost of maintaining a home in 1982 that was also the principal home of the qualifying individual for more than half the year.

* Your spouse was not a member of the household during at least the last six months of the year.

If you are single, the amount of expenses you may take into account may not exceed the amount of your earned income for the year, less any disability exclusion claimed.

For married taxpayers filing jointly, the amount of expenses claimed may not be greater than the earned income of the spouse who earned less.

However, if one spouse was incapable of self-care or was a full-time student, for the purpose of this ceiling, you may consider that he or she was "employed" with "earned income" of $200 month if you are claiming care of one dependent or $400 a month if you have two or more dependents.

You can apply this exception to either spouse each month, but to only one spouse in any single month. Therefore, at least one spouse must have been employed each month with earned income equal to or greater than whichever of these two amounts applies.

In addition, this assumption of earned income may be used only for those months in which the spouse was either incapable of self-care or a full-time student.

In some cases, you may have an option. The cost of nursing care for a disabled dependent may qualify either for this tax credit or as a medical deduction. You cannot claim both for the same expense, but you may take a tax deduction when it gives you the larger tax benefit.

If you are using the zero bracket amount, you should take the tax credit. But if you itemize and already have enough medical expense to exceed the three percent exclusion, then the choice depends on your tax bracket.

You should figure it out both ways to see which method results in the better tax break. Remember that if you decide to go the tax credit route, any qualifying expenses in excess of the $2,400/$4,800 limit may be added to medical expenses on Schedule A. Investment credit

If you are self-employed, you may claim a tax credit for your investment in certain depreciable personal property bought for use in your business or profession.

The old depreciation system based on the "useful life" of property bought for a trade or business was scrapped in the Economic Recovery Tax Act of 1981, and replaced by the Accelerated Cost Recovery System (ACRS) for business property placed in service after Dec. 31, 1980.

ACRS provides for faster write-off of business assets to encourage early replacement of older and perhaps inefficient equipment. The changes in depreciation methods made it necessary to make changes in the investment tax credit (ITC).

In 1982, the Tax Equity and Fiscal Responsibility Act scaled back some of the provisions of ACRS and the modified ITC that had been categorized as overly generous.

If you are engaged in a trade, business or profession you should read IRS Publication 334, particularly the section on ACRS and ITC. Consult the IRS or a tax adviser or accountant if you need help.employed, you may claim a tax credit for your investment in certain depreciable personal property bought for use in your business or profession.

The old depreciation system based on the "useful life" of property bought for a trade or business was scrapped in the Economic Recovery Tax Act of 1981, and replaced by the Accelerated Cost Recovery System (ACRS) for business property placed in service after Dec. 31, 1980.

ACRS provides for faster write-off of business assets to encourage early replacement of older and perhaps inefficient equipment. The changes in depreciation methods made it necessary to make changes in the investment tax credit (ITC).

In 1982, the Tax Equity and Fiscal Responsibility Act scaled back some of the provisions of ACRS and the modified ITC that had been categorized as overly generous.

If you are engaged in a trade, business or profession you should read IRS Publication 334, particularly the section on ACRS and ITC. Consult the IRS or a tax adviser or accountant if you need help. Investment credit

If you are self-employed, you may claim a tax credit for your investment in certain depreciable personal property bought for use in your business or profession.

The old depreciation system based on the "useful life" of property bought for a trade or business was scrapped in the Economic Recovery Tax Act of 1981, and replaced by the Accelerated Cost Recovery System (ACRS) for business property placed in service after Dec. 31, 1980.

ACRS provides for faster write-off of business assets to encourage early replacement of older and perhaps inefficient equipment. The changes in depreciation methods made it necessary to make changes in the investment tax credit (ITC).

In 1982, the Tax Equity and Fiscal Responsibility Act scaled back some of the provisions of ACRS and the modified ITC that had been categorized as overly generous.

If you are engaged in a trade, business or profession you should read IRS Publication 334, particularly the section on ACRS and ITC. Consult the IRS or a tax adviser or accountant if you need help.