Some relief available for taxpayers this year

Incorporated in 2000 tax forms are a handful of tax law changes that should make this April 16 a bit less taxing for most individuals.

The student loan deduction has been increased. So have write-offs for job-related use of cars and business equipment purchases. The eligibility requirements for deductible IRAs have been loosened a bit. The tax exemption for employer-provided educational assistance has been renewed. Transportation workers get a bigger deduction for out-of-town meal expenses.

And the standard deduction, personal exemption, earned income tax credit and other elements of the tax system have been adjusted for inflation.

At the same time, higher-paid workers will see more of their wages eaten up by Social Security tax. Tougher withholding rules apply to those with incomes above $150,000. And workers who received lump-sum distributions from their pension plans last year will find that a valuable method for reducing the tax bite has passed into extinction.

To be sure, the changes embedded in 2000 returns aren’t as numerous or as far-ranging as in the last few years. And they pale in comparison to what President Bush has proposed for the future. Despite a flurry of tax legislation last year, no major bills affecting individuals were signed into law.

But some tax bills enacted in prior years will affect 2000 returns. And most everyone will benefit to some degree from the annual inflation adjustments to the tax system.

The IRS also made some changes of its own. Among them are a new scheme to make "electronic" filing of tax returns a completely paperless process for almost everyone. Some mutual fund investors will find they can now use the short 1040A form to report their capital gains distributions instead of the 1040 form.

The IRS has stepped up its campaign to crack down on returns with missing or invalid Social Security numbers. And the "1040-PC" format for filing returns has been scrapped.

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