@111 CHAP ZZ

        ÚÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ¿
        ³  INCOME TAXES AND ESTIMATED TAX REQUIREMENTS  ³
        ÀÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÙ

@Q       "Taxation without representation is tyranny."
@Q         -- Patrick Henry
@Q
@Q       "Taxation with representation is worse."
@Q         -- Will Rogers

Individual federal income tax rates for 1993 (for joint
filers) are as follows:

            Taxable Income
               Bracket                 Tax Rate and Amount
           ----------------           ---------------------
           $0 to $36,900              15% of Taxable Income

           Over $36,900, up           $5,535 plus 28% of
             to $89,150                excess over $36,900

           Over $89,150               $20,165 plus 31%* of
                                       excess over $89,150


(* The actual marginal rate for taxpayers with Adjusted
   Gross Income over $108,450 may be higher, by another
   0.93% if they have certain kinds of itemized deductions
   which are subject to a phase-out, equal to a 3% reduc-
   tion in allowable itemized deductions for AGI in excess
   of $108,450.  In addition, joint filers with AGI over
   $162,700 will have part of their personal exemptions
   phased out, at a rate of 2% of the exemption amount for
   each $2500 of AGI, or fractional portion of $2500, in
   excess of $162,700.  This would add approximately 1/2%
   to the effective tax rate for each personal exemption
   claimed.  Thus, for a family of four in the 31% tax brac-
   ket, with AGI in the phase-out range for both itemized
   deductions and personal exemptions, the effective margin-
   al tax rate on each additional dollar of income would be
   about 34% in 1993.  Congress "simplifies" the tax law
   like this each year, a blessing for which we can all be
   grateful.)

  Use the TAXES command--MAIN Menu--to calculate your
   1992 & 1993 taxes.

Each of the rate brackets noted above is indexed for infla-
tion in each year.  If your filing status is other than
married, filing jointly, the size of each of the above brac-
kets is smaller.  For example, for a single person, the 15%
bracket ends at only $22,100 of income, rather than the
$36,900 for married filing joint, in 1993.

1992 federal income tax returns for individuals are due on
April 15, 1993, although an automatic extension of time to
file (but not an extension of time to pay the tax due) to
August 15, 1993, is available, simply by filing Form 4868
and paying the approximate tax due on April 15th.  (An ad-
ditional filing extension to October 15, 1993 may be avail-
able, by filing Form 2688, if you have a valid reason for
the delay.)

It is also possible to file your federal income tax return
electronically and the IRS will experiment with combined
federal/state filing of electronic tax returns in 1993.
@CODE: IN KS KY LA ME MI MS NY NC OK SC UT WV WS
@STATE is one of the 14 states testing this joint
federal-state electronic system of filing in 1993.
@CODE:OF

PAYMENTS OF ESTIMATED TAX.  For individual taxpayers, such
as self-employed persons (sole proprietors or partners in
a partnership), whose tax liability is not substantially
covered by withholding from wages, it is necessary to make
quarterly payments of federal (and in most cases, state)
estimated income tax and federal self-employment tax.  The
federal tax payments must be made with Form 1040-ES by the
15th day of April, June, September and on January 15th of
the following year.  Any remaining tax due (or refund) is
reported on Form 1040, individual income tax return, on the
following April 15th.

To avoid penalties for underpayment of estimated tax, the
amount of the quarterly payments must generally equal 90%
of the tax liability, with a "safe harbor" for most taxpay-
ers if they pay in an amount based on 100% of the PRIOR
year's tax liability during the current year.

NOTE: This safe harbor is no longer allowed after 1991 for
certain taxpayers if:

   . their AGI (Adjusted Gross Income) for the current
     year exceeds $75,000; and

   . their specially modified AGI for the current year ex-
     ceeds last year's AGI (not subject to the special mod-
     ifications) by more than $40,000 ($20,000 if filing
     married, separate); and

   . they paid estimated tax in at least one of the three
     preceding tax years (or were assessed a penalty for
     failing to do so).

The special "modifications" to the current year's AGI that
are excluded include gain from a sale or "involuntary conver-
sion" (fire, etc.) of a residence and income from an S corp-
oration or partnership, where the taxpayer has less than a
10% interest in the entity.)

Taxpayers who are no longer permitted to use the "safe
harbor," must pay in, as estimated tax, the LESSER of:

   . 90% of the current year's tax liability (the general
     rule for all taxpayers, except where the safe harbor
     applies); or

   . the GREATER of an amount based on:  (1) 90% of the
     tax on the "modified" current year taxable income;
     or (2) 100% of last year's tax liability.

For all practical purposes, the new rule means that, in 1992
and thereafter, if you are subject to the new rule, and your
AGI for the current year is not subject to any of the modi-
fications described above, YOU WILL ALWAYS HAVE TO PAY ESTI-
MATED TAX BASED ON 90% OF THE CURRENT YEAR'S TAX LIABILITY.
(Except on your first quarterly estimate, which can still
be based on 100% of the prior year's tax; or on any subse-
quent quarterly estimate, where your annualized income to
date indicates you will not exceed the $40,000 or $75,000
thresholds for the year.)

Clear as mud?  This is merely Congress's latest "simplifica-
tion" of the estimated tax rules, enacted November 15,
1991, and there are exceptions to the above exceptions, but
we suspect you may already be starting to get angry at your
Congressthing and somewhat confused by this point, so we
won't go any deeper into this particular hall of mirrors....

SCHEDULES C AND E.  There is no separate tax return form
for sole proprietors. A sole proprietor simply includes the
income or loss from his or her business on Schedule C of
form 1040.  Beginning with returns filed in 1993, some sole
proprietors may file a simplified Schedule C-EZ, which has
only about 1/3 as many lines to fill in as the regular
Schedule C.  The firms who qualify to use Schedule C-EZ
must meet 10 requirements, including:

  . Gross receipts of $25,000 or less;

  . Business expenses of $2,000 or less;

  . Using cash method of accounting;

  . Have only one sole proprietorship business;

  . No employees, no inventory;

  . No net business loss for the year; and

  . Not deducting home office expense.

@IF116xx]@NAME is a @ENTITY:
@IF116xx]
Like proprietorships, partnerships generally pay no tax
either, although they file an information return annually
(Form 1065) on which the income or loss of each partner is
reported on a Form K-1.  Each partner reports the income
or loss items on the K-1 form on appropriate schedules of
his or her Form 1040 (mainly on the Schedule E).  Accord-
ingly, partnerships and proprietorships do not, as enti-
ties, make estimated tax payments.

@CODE: AL
The maximum individual income tax rate in Alabama is 5%,
which starts at taxable income levels of $6,000 for married
persons filing jointly, or at $3,000 for other individual
taxpayers.
@CODE:OF
@CODE: AZ
Individual tax rates in Arizona were reduced after 1989
to a maximum of 7% on income over $300,000 ($150,000 for
single or married filing separate).
@CODE:OF
@CODE: AR
Individual tax rates in Arkansas start at 1% and rise to
a maximum of 7% on taxable income over $25,000.
@CODE:OF
@CODE: CA
          ÚÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ¿
          ³        CALIFORNIA PERSONAL INCOME TAXES       ³
          ÀÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÙ

California personal income tax rates begin at 1% of income
and rise to a maximum rate of 11% on income over $207,200
(over $414,400 for married taxpayers filing jointly, and
$282,030 for head of household) in 1992, which is higher
than the flat 9.3% rate at which California taxes the in-
come of corporations.  In addition, the individual alterna-
tive tax rate was raised to 8.5% in 1991, so that the
alternative tax has now become harder to avoid.

California's estimated income tax payment system parallels
the federal rules rather closely, with payments made on
Form 540-ES.  Beginning in 1993, California individual
taxpayers will also be subject to the same new rule as
recently adopted for federal tax purposes, limiting the
use of the ability to avoid penalty simply by paying in
an amount equal to the prior year's tax liability, for
certain individuals whose adjusted gross income is in
excess of $75,000 and has increased by more than $40,000
over the prior year's income (with certain adjustments
and exceptions).

As under federal law, partnerships doing business in the
state of California are not generally taxable entities, but
must still file an annual information return (Form 565) by
April 15th of the following year (for a calendar year part-
nership).  However, a limited partnership in California is
now subject to payment of annual minimum franchise tax
($800 a year), the same as paid by corporations.

@CODE:OF
@CODE: CO
Colorado taxes individual income at a flat rate of 5%,
based on federal taxable income with certain adjustments.
@CODE:OF
@CODE: CT
Connecticut recently enacted a personal income tax, at the
rate of 1.5% of taxable income in 1991, and 4.5% after 1991.
The former tax on capital gains and dividends is being
phased out.  (As of early 1993, the state legislature has
passed a bill that would raise the top bracket to 6.25% in
1993, but Gov. Weicker has vetoed the bill....Stay tuned.)
@CODE:OF
@CODE: DE
Individual tax rates in Delaware start at 3.2% on income
over $2,000 and rise to 7.7% on income over $40,000.
@CODE:OF
@CODE: DC
Individual tax rates in the District are fairly high, with
a top rate of 9.5% on income of only $20,000 or more.  Note
that business income of a partnership or sole proprietor-
ship is NOT generally reported on the individual partner or
proprietor's D.C. income tax return, but is instead separ-
ately taxable under the D.C. Unincorporated Business Fran-
chise Tax (Form D-30) at a tax rate of 10.5% (10.25% for
periods ending after September 30, 1992).
@CODE:OF
@CODE: GA
Georgia individual tax rates are fairly low, starting out
at 1% and rising to a maximum rate of 6% on income over
$10,000 (joint filers).
@CODE:OF
@CODE: HI

          ÚÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ¿
          ³        HAWAII PERSONAL INCOME TAXES       ³
          ÀÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÙ

Hawaii personal income tax rates begin at 2% of income and
rise to a maximum rate of 10%. Since the maximum corporate
tax rate is only 6.4%, there is often a considerable tax
incentive to incorporate a Hawaii business, although the
opposite tilt in federal corporation tax rates (since the
federal Tax Reform Act of 1986) will often more than offset
the state tax savings from incorporating.

Hawaii's estimated income tax payment system closely paral-
lels the federal rules, with individual estimated tax dec-
larations made on Form N-1.  Quarterly payments are due in
the same months as federal estimates, but on the 20th day
(not the 15th) of each such month.  As under federal law,
partnerships in Hawaii are not taxable entities, but must
still file an annual information return (Form N-20) each
year.  The income from a partnership is reported on
Schedule E of the partner's Hawaii individual income tax
return.

@CODE:OF
@CODE: ID
Individual tax rates in Idaho start at 2% and range up to a
maximum of 8.2% in the top bracket.
@CODE:OF
@CODE: IL
Illinois taxes individual income at a rate of 3%, applied to
federal adjusted gross income with modifications.  This tax
rate is due to decrease to 2.75% after June 30, 1993.
@CODE:OF
@CODE: IN
Personal income in Indiana is taxed at a rate of only 3.4%,
based on federal adjusted gross income, with certain adjust-
ments.
@CODE:OF
@CODE: IA
Iowa has relatively high individual tax rates, reaching a
maximum of 9.98% on taxable income in the highest bracket
($47,700 of taxable income) in 1993.
@CODE:OF
@CODE: KS
Kansas has a maximum individual tax rate (joint returns)
6.45% for joint filers and 7.75% for other taxpayers.  Re-
cent legislation did away with the election to deduct
federal income taxes on the Kansas tax return, effective
for the 1992 tax year.
@CODE:OF
@CODE: KY
Individual income in Kentucky is taxed at a maximum rate
of 6%, on income of over $8,000.
@CODE:OF
@CODE: LA
Personal income tax rates in Louisiana top out at 6% on
income over $50,000 (per individual taxpayer, regardless
of filing status).
@CODE:OF
@CODE: LS
Personal income tax rates in @STATE start out at
96% on and go up as high as 1000%.  Members of the Inner
Party are exempt.
@CODE:OF
@CODE: ME
Individual tax rates under Maine's income tax law start at
2.1% and go up to a maximum of 9.89% (1992 rates) on income
over $75,000 (joint returns), which includes the 1991-1992
surtax.
@CODE:OF
@CODE: MD
Maryland taxes the income of individuals at rates of 2% to
6%.  The 5% tax bracket begins at income levels of only
$3,000, however, and only reaches 6% at levels of $150,000
for joint filers or heads of household ($100,000 for single
or married filing separate).  Many counties, including
Baltimore, also impose local income taxes.
@CODE:OF
@CODE: MA
Most kinds of income, such as earned income, are taxed at
an individual tax rate of only 5.95% in Massachusetts after
1991.  However, investment income such as interest, divi-
dends and net capital gains are taxed at a 12% rate.
@CODE:OF
@CODE: MI
Michigan imposes a 4.6% income tax on the taxable income of
individual taxpayers, which is based on federal taxable in-
come with certain adjustments and modifications.  However,
a person's business income is also subject to the 2.35%
Michigan "Single Business Tax," which is somewhat similar
to an income tax, but with no deductions for wages or sal-
aries, and without taking into account interest income or
expense or royalty income or expense, as well as making
certain other adjustments.
@CODE:OF
@CODE: MN
Minnesota taxes individual incomes at rates of 6% to 8.5%.
There is also an alternative minimum tax, which applies to
alternative taxable income at a rate of 7%.
@CODE:OF
@CODE: MS
Mississippi taxes individuals' taxable income of over
$10,000 at a 5% rate.  Tax rates start at 3% on the first
$5,000 and go up to 5% on taxable income over $10,000.
@CODE:OF
@CODE: MO
Tax rates on individuals in Missouri start at 1.5% and rise
to 6% on income over $9,000.
@CODE:OF
@CODE: MT
Montana had the distinction of having one of the highest
individual tax rates of any state, at 11% on income over
$59,400 in 1992.  In addition, there was a 2.3% surtax for
the taxable year 1992.  However, the Montana individual
tax system has been completely overhauled for 1993, so
that now there is a flat tax rate equal to 6.7% of taxable
income for individuals, but with no itemized deductions
or personal exemptions allowed under the new tax system.
@CODE:OF
@CODE: NB
Individual income tax rates in Nebraska start at 2.62% and
go up to a maximum rate of 6.99% (1993 rates).
@CODE:OF
@CODE: NJ
Personal income tax rates in New Jersey were substantially
increased, to 7% for various brackets, depending on filing
status, beginning in 1991.
@CODE:OF
@CODE: NM
New Mexico's personal income tax begins at a tax rate of 2.4%
on income of $8,000 or less and tops out at a maximum tax
rate of 8.5% on taxable income in excess of $64,000 (joint
filers).
@CODE:OF
@CODE: NY
New York State individual income tax rates start at 4.55% on
the first $13,000 of income and are graduated up to a maxi-
mum rate of 7.875% on income taxable income in the highest
income bracket (1993 rates, for married couples filing joint
returns).  The maximum rate is scheduled to decline on April
1, 1994 (to 7.5%) and again on April 1, 1995 (to 7%), but
don't hold your breath, in light of the state's current
fiscal dilemma.  (The top rate of 7.875% has already been
"extended," and this is likely to occur again.)

There is also a "tax table benefit recapture supplemental
tax" that takes back the benefit of lower tax brackets, on
a sliding scale, for taxpayers whose adjusted gross incomes
exceed $100,000, with full recapture occurring at levels of
$150,000 or more.

Note that taxpayers in New York City are also subject to
New York City income tax.
@CODE:OF
@CODE: NC
Tax rates on individual income in North Carolina start at
6% and go up to a maximum tax bracket of 7.75%.
@CODE:OF
@CODE: SC
Tax rates on individual income in South Carolina start at
2.5% and go up to a maximum tax bracket of 7% on income
over $10,600, in 1992, with the top bracket starting at
$10,800 in 1993.
@CODE:OF
@CODE: ND
North Dakota has a very high nominal tax rate of 12% on
individual income over $50,000.  However, taxpayers may
elect to instead pay a tax equal to 14% of their federal
income tax (with adjustments) for the year.
@CODE:OF
@CODE: OH
Ohio's highest individual tax rate is 6.9% in 1992.  This
rate applies only at income levels of $100,000 or more.
However, starting in 1993, there is a new 7.5% tax bracket,
on income over $200,000.
@CODE:OF
@CODE: OK
Oklahoma's personal income tax law imposes a relatively high
maximum tax rate of 10%, but allows taxpayers a deduction
for federal income taxes.  For taxpayers who do not deduct
federal income tax, a lower Oklahoma tax rate applies,
with a maximum bracket of only 7% (in 1992).
@CODE:OF
@CODE: OR
Oregon taxes individual income at rates ranging from 5%
to 9%.
@CODE:OF
@CODE: PA
Pennsylvania's  current regular income tax rate is 2.8%,
plus a temporary surtax of 0.3% that applied during the
last six months of 1991 and the first six months of 1992.
Pennsylvania taxable income consists of 8 categories of
income, and in general bears very little resemblance to
federal taxable income.  No personal exemptions are al-
lowed, for example.

In addition, the cities of Philadelphia, Pittsburgh, and
Scranton all impose city income taxes on individuals' ear-
nings and on net profits from businesses and professions.
@CODE:OF
@CODE: RI VT
Individual taxpayers in @STATE compute their state
income tax as a percentage of their federal income tax
liability, which, at present, is computed at the rate of
@CODE:OF
@CODE: RI
27.5% of the federal tax (on federal tax in excess of
$15,000, the rate is temporarily increased to 29.75% in
1992 and 32% in 1993).
@CODE:OF
@CODE: VT
28% of the federal liability, rising to as much as 34%
of the federal tax liability over $13,100 in 1991-93 tax
years.  The rate is supposed to drop back down to 25%
after 1993.  (A special "land gains tax" also applies to
capital gains on land sales or transfers, if land was held
for less than 6 years.)
@CODE:OF
@CODE: UT
Utah taxes individual taxpayers at income tax rates ranging
from 2.55% up to 7.2%.
@CODE:OF
@CODE: VA
Personal income tax rates in Virginia range from 2% up to
a maximum tax bracket of 5.75%, which begins at $17,000 of
income.
@CODE:OF
@CODE: WV
West Virginia taxes individual income at rates up to 6.5%
on income of over $60,000 (over $30,000 for married filing
separate returns).
@CODE:OF
@CODE: WS
Wisconsin individual income tax rates range from a low
bracket of 4.9% to a top bracket of 6.93%
@CODE:OF
@CODE: AK FL SD NV TX WY WA TN NH
There is no individual state income tax in @STATE.

@CODE:OF
@CODE: SD
South Dakota voters decided on November 3, 1992, not to
approve an income tax, that would have imposed rates up
to 6%.
@CODE:OF
@CODE: NH
(Except on certain investment income -- interest and divi-
dends -- at a rate of 5%.)

However, there is also an 8% Business Profits Tax, similar
to an income tax, on all business entities, incorporated
or otherwise, with over $12,000 of gross income.
@CODE:OF
@CODE: TN
(Except on certain investment income -- interest and divi-
dends from stocks and bonds.)
@CODE:OF
@CODE: WA
However, Washington imposes a Business and Occupations tax,
which varies by type of business, on most forms of business
gross income. The tax rate ranges from about 1/2 of 1% up to
2%, generally, with a new 2.5% tax on various business ser-
vices, effective July 1, 1993.
@CODE:OF

        ÚÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ¿
        ³      CORPORATE ESTIMATED TAX REQUIREMENTS     ³
        ÀÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÙ

A C corporation (or an S corporation, if it is subject to
tax, which it usually is not) must make quarterly payments
of estimated federal corporation income taxes on the 15th
day of the 4th, 6th, 9th, and 12th months of its taxable
year.  All such tax payments must be made as tax deposits
in a depository bank, accompanied by a Federal Tax Deposit
coupon.  Don't attempt to send such corporate tax payments
directly to the IRS, which will either return them to you,
lose them, or ignore them, any one of which results will
be most unpleasant to you, including the standard 5% pen-
alty that will apply if you try making a direct payment to
the IRS. (This, of course, is the infamous Catch 22
you've heard so much about -- You can be penalized for
PAYING your taxes, as well as for not paying them!)

With certain exceptions, a corporation must generally pay
in 90% of its total tax liability for the year as estimated
tax payments in order to avoid the penalty for underpayment
of estimated tax. However, starting in 1992, the percent-
age of its current year tax that a corporation must pay in
as estimated tax, to avoid underpayment penalties, in-
creased from 90% to 93%, and increased further to 97% for
tax years beginning after June 30, 1992, before (theoreti-
cally) dropping back to 90% after 1996. (Certain "large"
corporations are no longer allowed to base their current
year estimated tax payments on their prior year tax lia-
bility, except for the first quarterly payment of the
current year.)

@CODE: CA
California also requires corporations to make quarterly
estimated tax payments, on the same due dates as the fed-
eral quarterly payments, and generally following the same
rules.  However, the first California quarterly franchise
tax payment by a corporation must at least equal the mini-
mum franchise tax for the year, which is $800 a year.

Starting January 1, 1993, the percentage of estimated tax
that must be paid in as estimated tax payments increases
from 90% to 95% of the actual California franchise tax
liability for the year.  However, corporations other than
certain "large" corporations will still be able to avoid
tax underpayment penalties if they pay in an amount equal
to at least 100% of the PRIOR year's tax liability.

"Large" corporations, for this purpose, are those that
had at least $1 million of taxable income in any of the
three preceding taxable years.

@CODE:OF
@CODE: HI
Hawaii also requires corporations to make estimated income
tax payments, with Form N-3.  However, unlike the quarterly
federal payments, Hawaii requires only 2 annual payments to
be made, on September 20 and the following January 20th for
a calendar year corporation.

@CODE:OF
@CODE: NV TX WA WY
Most states also require corporations to make payments of
estimated corporate income taxes (but there are no such
taxes in @STATE).
@CODE:OF