Tax Guide Free-for-All : Publishers Boost Sales of Manuals With Giveaways

It's no accident that every income tax manual on the market today has a "special offer" or "free" deal.

The "Consumer Reports Guide to Income Tax Preparation" offers a free two-month subscription to Consumer Reports magazine. The "Money 1993 Income Tax Handbook" qualifies you to get an issue of Money magazine and their three-part guide to wealth-building, called "Money Phases."

The "H&R; Block 1993 Income Tax Guide" includes a coupon for $10 off on H&R; services--in case you throw up your hands in desperation and decide to hire a pro. And the "Ernst & Young Tax Guide 1993" offers discounts on tax software, electronic filing and other tax books. "J.K. Lasser's Your Income Tax 1993" offers a free six-week subscription to Barron's newspaper.

Why the freebies? Because these income tax guides are largely unnecessary for the 2 million or so consumers who bought them last year. That's because there have been few year-to-year revisions in the tax code.

All you are missing if you have one of last year's tax guides is a brief--usually one- or two-page--summary of what's new. And, generally speaking, all that's new for individual filers is inflation adjustments. That news is hardly worth the $12 to $14 you'll pay for a new tax guide.

Nevertheless, tax guides continue to be best-sellers. All of the five major guides made Publishers Weekly's March list of best-selling "Almanacs, Atlases and Annuals." And publicists for several of the guides expect sales to exceed last year's figures, often by substantial amounts.

Indeed, Barnes & Noble booksellers recently noted that sales of tax guides are up 7% from last year. John Wiley & Sons, which publishes the Ernst & Young guide, says sales of its tax tome have soared about 15% above last year's brisk pace.

"There is a certain fear factor that causes people to buy these things," says Roger Baran, marketing and sales director for Consumer Reports Books, which also reports a sales increase. While that's not completely logical, "it's good for us," Baran says.

Notably, however, the guides differ rather substantially even though they're all based on the same tax code and all strive for the same goal: to make it easier for you to fill out your tax returns.

Some simply do not make the task any easier. And some don't give guidance on issues that are likely to be pivotal to many taxpayers.

For example, millions of consumers refinanced mortgages last year. What do the various tax guides say about deductibility of the loan points?

The Consumer Reports guide says nothing about this type of up-front charge, which can be deducted over the life of the loan. The H&R; Block book says the cost "may be deducted ratably over the term of the mortgage."

The Ernst & Young book doesn't specifically address a simple refinancing--it concentrates on home improvement loans--but does parenthetically note that points can be deducted "over the life of the loan."

Only J.K. Lasser and Money give examples of how it works. The Money book also notes a way you can boost the deductible portion in the early years, and its explanations are generally the clearest.

Early retirements were also prevalent in 1992. What do the books say about pension plan distributions and rollovers?

Lasser's guide has a 23-page chapter on retirement and annuity income that both explains the form you'd get from your plan administrator and the tax consequences of various retirement options.

The Money guide also devotes about 20 pages to retired persons. However, the section is somewhat less clear.

Consumer Reports' 30-page pension chapter goes over all the issues in Money and Lasser, but it's somewhat difficult to read. On the bright side, sample forms you may need are included in the same section.

Ernst & Young includes copious work sheets in its retirement chapter. However, the book gives precious few details on tax-free pension plan rollovers, referring readers to an IRS publication for details.

The H&R; Block book talks about "reporting a rollover" in a single paragraph in a section titled "Adjustments to Income." For further details, readers are referred to Chapter 20: "An Encyclopedia of Tax."

There's also some information on lump-sum distributions in Chapter 13. In other words, the information seems to be there, but it's disjointed and hard to read.

Other pros and cons of these tax tomes:

* Lasser starts its book with a picture of a 1040, with a notation next to each line on where you can find information on that subject in the book. It also has an excellent index, so finding what you want is fairly simple.

* H&R; Block has imitated the concept, but it is less detailed. Block has also tried to set up its book so that it progresses along with the 1040. If you need help with the whole 1040, that makes it easier. But it makes it tougher to find individual items, if you just need guidance on a few points.

* Ernst & Young's book is sprinkled with numerous "TaxPlanner" and "TaxSaver" boxes, as well as boxed and highlighted examples. It's clearly meant to make the book easier to read, but actually mucks things up because you can rarely finish a section without being interrupted by the boxes.

* Consumer Reports has an index of forms included in the book, which is helpful.

* Money's manual is written in a sprightly fashion. But its index, which refers readers to "section and exhibit numbers" rather than pages, is not very helpful.

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