11 I a • a tIIR 11 1 OO O OOOO OO OOO OO OOO 11 •,•1 HAPPY CHANUKAH The Finest in Men's Fashion Footwear is at ."1 t, ns ',gni{ A Happy & Healthy Hanuka To All Our Friends, Relatives And Customers Jewish Community Council We don't know the date. We don't know the time. But we know we'll be there! A sea of demonstrators representing our brothers and sisters in the Soviet Union must greet Soviet General Secretary Gorbachev when he comes to the United States for Summit II. We must tell him: "Let Our People Go." Soviet Jewish Prisoner of Conscience Anatoly Shcharansky was released from the Soviet Union because people demonstrated that they cared. Won't you join us in Washington to show Gorbachev we care? Please sign and return the form below so we may send you details of this major rally in Washington when the date for Summit II has been set. Return to: Summit II Task Force 163 Madison Ave. Detroit, Michigan 48226 Tax Reform Act Changes, Tips 2823 Coolidge, Berkley 543-3505 BIRMINGHAM FLINT Mikhail Gorbachev will be in Washington, D.C. sometime during the next few months. FINANCE Berkley Health Foods NATIONAL MOBILIZATION FOR SOVIET JEWS • Vag/ •W1 • I SINGLE ALAILAN's SOUTHFIELD WEST BLOOMFIELD Ttopmr.07,-,la Please Print Yes, I will be there to greet Gorbachev. Let me know when this important meeting will take place. Name Address City/State/Zip OO AMERICAN GRILLE A RESTAURANT AND MUCH MORE! Lunch Served Monday Through Friday 11:00 a.m. till 4:00 p.m. Dinner Served Until 12:00 Midnight Monday Through Saturday Nibbles and Dancing Till 2:00 a.m. Now Accepting Reservations For Our Joyous New Year's Eve Celebration Call For Information On Our Complete Package IN THE AMERICAN CENTER BUILDING 27777 FRANKLIN ROAD Southfield 350-8450 BANQUET FACILITIES UP TO 175 PEOPLE VISIT OUR OTHER LOCATIONS ... PANACHE IN BIRMINGHAM AND MAVERICK'S IN ROYAL OAK 86 Friday, December 26, 1986 THE DETROIT JEWISH NEWS JAMES D. GREY The Tax Reform Act of 1986 affects nearly every taxpayer, whether single, separated, head of household or married. This article highlights the tax law changes that will affect in- dividual taxpayers beginning in 1987, as well as offer "last minute" tax tips and sugges- tions for the balance of 1986. Tax reform legislation changed nearly every area of taxation, including the tax rates, exemptions, itemized deductions, IRA contributions, capital gains and tax shelters. Among the most sweeping changes made by the Tax Re- form Act of 1986 is the reduc- tion in the number of tax brac- kets for individuals,from 15 in 1986 to only two in 1988. The act also reduces the top tax rate from the current 50 percent to 28 percent in 1988. The act provides for phasing in the new tax rates. Thus, the tax rate for 1987 is actually a blend of the old and the new rates. The act increases the amount of the current personal exemption from $1,080 to $1,900 in 1987, $1,950 in 1988 and $2,000 in 1989. Also be- ginning in 1987, a taxpayer who can be claimed as a xlepen- dent of another taxpayer's re- turn may not claim a personal exemption for himself on his own tax return. What does this new tax law do for the single taxpayer? As- sume a single taxpayer has $12,000 of salary income, $100 of interest income, no IRA, no charitable contributions and no itemized deductions. The federal tax for 1986 is $1,197 (about 10 percent of gross in- come); the tax for 1987 is $1,077 (about 9 percent of gross income, but about 10 percent less than the 1986 tax); the tax for 1988 is $1,072. The tax for 1988 is $1,072. The federal in- come tax decreases slightly each year. A single taxpayer with taxa- ble income of $110,000 will pay federal income tax of $41,981 in 1986 (50 percent marginal tax bracket), $36,314 in 1987 and $31,346 in 1988 (28 per- cent of taxable income plus the personal exemption of $1,950. The decrease in tax from 1986 to 1988 is 25 percent. Taxpayers will no longer be able to use income averaging to compute their tax liability, be- ginning with the 1987 tax year. The deduction for consumer James D. Grey, C.P.A., is a partner in the firm of Gross, Bornstein, Grey and Co., P.C., in Birmingham. interest, such as interest on a personal auto loan or credit card, will be phased out over a five-year period. The tax act retains the de- duction for mortgage interest, but only for the taxpayer's principal and a secondary resi- dence. Moreover, the deduction is limited to interest on inde- btedness up to the purchase price of the property plus the cost of any improvements. The interest on additional inde- btedness may be deductible if the debt is incurred for- educa- tional or medical expenses. Observation: Taxpayers may find - it advantageous to obtain a higher mortgage on their homes to replace con- sumer debt, for which the interest deduction is phased out. The act repeals the itemized deduction for state and local sales taxes beginning with the 1987 tax year. Planning tip: consider ac- celerating major purchases be- fore the end of 1986 in order to obtain the benefit of the sales tax deduction for such items as an automobile, boat or airplane. State income taxes, as well as local property taxes, are still fully deductible as itemized deductions under the act. The act raises the floor for deductible medical expenses to the amount over 7.5 percent of adjusted gross income, begin- ning with the 1987 tax year. Presently unreimbursed medi- cal expenses over 5 percent of adjusted gross income are de- ductible. Taxpayers may no longer deduct a non-business casualty loss that is covered by insur- ance but for which they choose not to file a claim. Beginning in 1987, no deduction will be allowed unless a timely insur- ance claim is filed. Only the aggregate amount in excess of 2 percent of ad- justed gross income is de- ductible, beginning with the 1987 tax year. These de- ductions include unreim- bursed employee travel costs, union dues, business periodi- cals, tax preparation fees, in- vestment advisory fees, safe deposit box rental, uniforms and job-related education ex- penses. The act still allows tax- payers to avoid estimated tax penalties if they pay 100 per- cent of.the previous year's tax liability during the current year. However, the act mod- ifies the alternative basis for avoiding the estimated tax penalty. Beginning in 1987, the required estimated tax payment is increased from 80