On October 21, 1998, President Clinton signed into law the second piece of legislation, the Tax and Trade Relief Extension Act of 1998 . This new law retroactively extended several tax provisions that had expired and made numerous changes and technical revisions. Here are some of the changes:

• Extended the research and work opportunity credit to June 30, 1999.
• Extends and makes permanent income averaging for farmers, allowing net operating losses from a farming business to be carried back for five years.
• Increases the percentage of health insurance cost that is deductible by self-employed individuals to 60% for tax years beginning in 1999.
• Provides that where the winner has the option of choosing an annuity or lump sum, and chooses the annuity, the full value of a prize is not required to be included in the current year's income.
• Increases the percentage of the prior year's tax that must be paid by high-income taxpayers to avoid the estimated tax penalty to 106% for tax years beginning in 2000.
• Provides that the rule that reduces the additional child credit by the amount of an individual's alternative minimum tax will not apply in tax years beginning in 1998.
• Contains numerous technical corrections to previous legislation.

For more information, eMail: "mailto: taxinfo@electrofile.com"> taxinfo@electrofile.com

All information provided is general in nature and intended to create awareness, not to address the specific circumstances or concerns of any individual or entity. Although we try to provide correct and timely information, we cannot guarantee the accuracy of any information or that such information will continue to be accurate in the future due to the changing nature of the tax laws. Before acting on any of the information provided here, you should consult with a professional advisor who knows all of the unique facts and circumstances pertinent to your particular situation.

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