FILE NEW FORM TO CORRECT AMOUNT WITHHELD

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, February 15, 1992                   TAG: 9202150041
SECTION: BUSINESS                    PAGE: A-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium
FILE NEW FORM TO CORRECT AMOUNT WITHHELD
Most Americans pay all their federal income tax by having it withheld from their paychecks. Receiving any kind of income that is not subject to withholding may necessitate making additional payments, as often as each quarter.
If all your income is from wages, you still may not be paying the right amount in advance. Getting a big refund means you are letting the government use your money interest-free. Sending a sizable check could subject you to a penalty for underpaying.
Either way, you can correct the problem by filing a new Form W-4 with your employer. Use this form to calculate how many withholding allowances you want to claim. In 1992, each allowance will avoid withholding on $2,300 of income.
In figuring allowances, you must take into account how many dependents you have for tax purposes, the size of your itemized deductions and whether you claim any tax credits, such as for child-care expenses.
Taxes generally are not withheld from some types of income, including earnings from self-employment, most interest, dividends and capital gains. If you have a considerable amount of such income, you may need to pay some additional tax each quarter to avoid owing a large sum when you file your return next year.
For 1992 you must pay in advance - through withholding, quarterly payments or a combination of the two - 90 percent of your estimated 1992 liability or 100 percent of 1991 liability, whichever is smaller. The rule does not apply unless your estimated liability for 1992 is $500 or more.
There is a new and tougher rule for some high-income taxpayers: If your 1991 adjusted gross income exceeded $75,000 and you expect that figure to rise by at least $40,000 in 1992, you must make advance payments totaling at least 90 percent of this year's liability.

by Bhavesh Jinadra by CNB