Smaller Tax Changes Could Have Big Impact for Some : Congress: Health and welfare are in the spotlight, but a host of less sweeping proposals could hit Americans in the pocketbook.

The indictment of House Ways and Means Committee Chairman Dan Rostenkowski leaves a lot of tax questions hanging in mid-air. Future uncertainties about the biggest and most sweeping--health care and welfare reform--have been amply aired.

But a host of smaller pocketbook issues are hanging out there, too. Some desirable measures may fall to earth and disintegrate. Other less desirable measures may get enacted and come crashing through the well-hatched savings and investment plans built by many Americans.

If you are the type of person who spends part of every day looking upward for a falling sky, watch out in particular for these atmospherics:

* A fix of the “nanny tax.” Both the Senate and the House have passed bills that would raise the threshold of household help’s income below which employers would not have to pay Social Security taxes or withhold income taxes. Currently it stands at $50 a quarter--an amount that pulls in even the occasional lawn mower or teen-age baby-sitter and virtually guarantees widespread noncompliance.

This is a very popular measure, but the House loves it more than the Senate. Besides raising the threshold (under the Senate version, these taxes would have to be paid for domestic help earning more than $630 a year; the House version bumps it all the way up to $1,250 annually), the House has generally shown more willingness to approve revenue losers than the Senate. A weakened Ways and Means Committee could lose this provision altogether or easily throw that extra $620 a year overboard.

* Loophole lost for the property owner. Congress perpetually looks at property owners as a source of tax income and tries to hone in on the more affluent for tax hikes.

One break that’s helped property owners who rent out their homes (or secondary homes) for two weeks or less in a year is about to disappear. This provision allowed owners with rental income for 14 days or less to pocket the income without any tax or reporting consequences.

A “technical corrections and simplification” bill which has passed the House but not yet passed the Senate (though it’s likely) would eliminate this break. Homeowners would have to declare the income but could offset taxes by declaring rental expenses up to the amount of that income. Look for this to become law regardless of Ways and Means politics.

* Succor for the self-employed. Legions of home-office workers are watching Congress for two long shots that grow longer as the legislative session shortens. Numerous bills would broaden the home-office deduction to accommodate the painters, veterinarians, anesthesiologists and other pros who thought they had the deduction until the Supreme Court tightened it last year.

But this revenue loser has yet to find a legislative tree upon which to hang, and Rostenkowski’s departure makes any new tax provisions much less likely before year’s end.

A second bill, allowing self-employed workers to deduct 100% of their health insurance premiums, is wrapped up in health care reform and is unlikely to be granted until the big picture is resolved.

* Distant threats. Scarier to many taxpayers (and the industries that sell to them) are a series of provisions that are always on the back burner but never turned completely off.

The Clinton Administration has its hit list of revenue raisers; so does Congress and its Congressional Budget Office staff. Among the tax breaks always susceptible to cancellation: interest deductions for mortgages on second homes (seen as a rich person’s break), tax deferral on annuities (seen as the insurance industry’s way of offering back-door retirement plans under the guise of insurance policies), and any and all benefits that reduce federal estate taxes. That last category still is seen as one of the least painful (if of questionable logic) ways to raise money.

Taxpayers who save and invest should remember the golden rule: Don’t pick your opportunities by their tax breaks. While taxes, like death, are certain, deductions are not.