Most people assume that the basic elements of their tax return will not change from year to year. This is not always true! Here are some points on which you could end up saving.

• DETERMINE YOUR INDIVIDUAL FILING STATUS

The categories are: married filing jointly/surviving spouse, head of household, single, and married filing separately. Married couples may file a joint return or separate returns--filing jointly usually saves taxes.

• DON’T FORGET CHILD TAX CREDIT

Parents of children under the age 17 at the end of the year can claim a tax credit of up to $500 per child in 2000. The child must be your dependent and be a son or daughter (or other descendant), a stepson or stepdaughter or an eligible foster child.

• HOME OFFICE EXPENSES COUNT TOO

In order to qualify for a deduction related to a home office, you generally must use that area exclusively and regularly as your principal place of business where you meet or deal with clients. Or use it for the administrative/management activities of the business, but only if there is no other fixed location where the taxpayer conducts those activities. A separate structure unattached to your house that you use for business may also be eligible.

• HEALTH INSURANCE FOR THE SELF-EMPLOYED

Employers whose businesses provide health insurance coverage may deduct 60% of insurance premiums paid for individual or family medical coverage in computing AGI, if all requirements are met. The remaining 40% is treated as a medical expense itemized deduction, which is subject to limitation.

Source: James Ellis, CPA, Principal-Ellis and Associates CPAs, PA