New Tax Law Removes Complicated 1991 Rule : Change: The 100%-of-prior-year standard will be restored, starting in 1994, for any individual or married couple filing jointly with prior-year income of $150,000 or less.

Though the 1993 tax law may seem unfriendly in many ways to people with relatively high and rising incomes, it also gives them a break of sorts.

A provision in the measure significantly eases a complicated set of rules that could catch many people--including quite a few who don’t consider themselves “rich”-- off guard.

These rules have no effect at all on the amount of tax anyone must pay. Rather, they set the minimum portion of the taxpayer’s tab for any given year that must be paid through withholding or quarterly estimated taxes.

In order to avoid a penalty and interest charges, the basic requirement calls for people at all income levels to pay at least 90% of the ultimate total for the current year--or, alternatively, an amount equal to 100% of the previous year’s total--in the course of the year.

For many wage earners, this standard is normally met without complication through withholding taxes calculated and collected by the employer, based on the standard deduction and the number of dependents each employee has.

The great majority of taxpayers each year winds up overwithheld--that is, entitled to a refund.

But if an individual or family is self-employed, has investment income or makes money in some other way that isn’t covered by payroll withholding, the situation can quickly get more complicated.

Unless these people can cover their extra obligations through increased withholding taxes, they must file quarterly estimated returns.

Two years ago, a law was passed making the 100%-of-prior-year standard off limits to certain taxpayers with incomes of $75,000 or more, if that income increased by $40,000 or more in the current year and they had filed an estimated return in any of the three previous years.

Lurking in the thicket of these requirements was the threat that someone who had a sizable increase in income, whether expected or not, might unwittingly wind up underwithheld, facing both penalties and interest on the shortfall.

Now, under the new law, the 100%-of-prior-year standard is restored, starting in 1994, for any individual or married couple filing jointly with prior-year income of $150,000 or less.

If the prior year’s income was above $150,000, the minimum payment is raised to 110% of the prior year’s total tax.

“The new law is simpler,” Coopers & Lybrand points out, “because the trigger for higher estimated payments is based on the prior year, not the current year.”

The accounting firm of Grant Thornton, in its analysis of the new law, says of the simplified standard: “Many high-income individuals will find this safe harbor preferable to the alternative of computing precise quarterly estimates.

“Additionally, it can represent a substantial reduction in the amount of estimated tax you will be required to pay in a year in which you experience an unusually high income.”

Furthermore, advisers note, the new setup relieves uncounted numbers of other people of the burden of staying alert for the possibility that they might fall into the trap created by the 1991 law.

In effect, it gives them one less reason to worry about the side effects should they succeed at some business venture, sell a winning stock, or otherwise achieve a big increase in their income.