We spend a lot of time helping clients reduce or defer their business and personal tax obligations. As you are no doubt aware, Congress and the President have enacted a new tax bill that certainly equals, if not surpasses, many tax investment strategies. While the new code is not the answer to every tax payers dreams, there is certainly a lot in it to be thankful for. Here are some of the changes:

• Capital Gains Tax - Effective May 7, 1997, capital gains tax changes from 28% to 20%.
• Gift Tax - Over the next 10 years, the $600,000 general gift exemption will increase to $1,000,000. If you have a small family-owned business or a working farm, the exemption increases in 1998 an additional $700,000. Remember the general exemption is per individual, so for married couples the advantages could double.
• Health Insurance - Deductibility is accelerated for self-employed from 40% to 80%.
• Home Sales - Up to $500,000 per couple ($250,000 if single owner) profit is exempt from capital gains tax on the sale of a home. Unfortunately, the "rollover gains" provision for profits of previous home sales is eliminated. NOTE: Talk with your accounting professional if you have large accumulated gains from the sales of previous homes and are considering selling an expensive home and moving down in price.
• Electronic Payroll Tax Filing - Small business will not be penalized until July 1, 1998 for not filing payroll taxes electronically.
• Home Office - The new code expands deductions if business owners use their homes for management and administrative activities.
• Alternative Minimum Tax - Businesses with revenues of less than $5 million may no longer be subject to the AMT.