Q. I am single and earned $45,000 in 1990. I expect to earn about $48,000 this year. I know that Congress made some changes in the tax brackets late last year. Will I be affected?
A. Personal income tax brackets were changed as part of the Revenue Reconciliation Act that Congress passed last year. The new income tax brackets for 1991 are as follows:
Fifteen percent bracket is for unmarried individuals with incomes under $20,350 and for married couples filing jointly earning under $34,000. Those limits are up from $19,450 for single filers and $32,450 for couples for the 1990 tax year.
Twenty-eight percent bracket is for unmarried individuals with incomes between $20,350 and $49,300. For married couples, the range is $34,000 to $82,150. Those limits are up from $47,050 and $78,400, respectively, in 1990.
L Thirty-one percent bracket applies to all incomes over that.
You were in the 28 percent bracket last year and under the new rules will remain in that bracket even though your income will rise. However, any income earned above $49,300 will be taxed at the 31 percent rate.
Q. I am expecting my divorce to be final next week and m settlement is to be $20,000. I would like to invest this money where I can earn more interest than my passbook savings account earns, but I don't want to take any risks with my money. What do you recommend?
A. What I would recommend would depend upon your individua situation and whether or not you want any or all of this money accessible to you. For example, if you need part of the money as a cash reserve for emergencies, I would recommend that you consider an insured money market account available through many banks and savings and loan associations. The money would be readily available with no penalty for withdrawal. If you want to save some of the money for retirement, you may want to consider an annuity.
Q. My husband and I have been U.S. citizens for 20 years. Whe we retire we would like to return to our home country in Europe. Will we be eligible for Social Security benefits if we move back? We're both employed and contribute to the Social Security system.
A. There should be no problem in collecting the Social Securit benefits you are entitled to while living in Europe as there is no requirement that you reside in the United States to collect benefits under Social Security.
Contact your local Social Security office early to get all the information you need before you retire.
Send questions to Karen Lazarovic, Columbia Features Inc., PO Box 1957, New Smyrna Beach, Fla. 32170.