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ESTATE TAXES: THEY AREN'T JUST FOR THE RICH ANYMORE

With stocks again racking up record after record, many investors should be researching an issue that once concerned only the rich: finding ways to cut the tax bite on your estate.

Many middle-income folk assume estate planning isn't necessary. After all, for years there was no estate tax at all on the first $600,000 you left behind. And last summer Washington set new thresholds. The limit gradually increases to $1 million in 2006.

That may seem like a lot. But once the value of your home is added to your investments, retirement plans and life insurance, you may have a taxable estate someday, even if you're not a fat cat. And this bite is pretty severe, starting at 37 percent and rising to 55 percent.

For taxable estates of modest size, there are some simple estate-reduction techniques, such as giving assets away. Each spouse can give up to $10,000 per year to each of an unlimited number of people without incurring gift tax, which has the same rates as estate tax. In addition, you can give away an unlimited amount to pay for college, private school or other education expenses.

Taxpayers zap returns to IRS
More U.S. taxpayers filed their tax returns electronically this year as the early filing season started off faster than last year, H&R Block Inc. says.

Block reported that tax preparers in its nearly8,800 U.S. offices handled nearly 8 million tax returns during January and February, or 5.7 percent more than during the same two months last year.

Of those, some 6.5 million returns, or 22 percent more than last year, were filed electronically, Block reported. Both the company and the Internal Revenue Service are trying to encourage taxpayers to file electronically. The taxpayers most receptive to the message are those who expect a refund.

The pick of the letter(s)
Philip Morris Cos. scored 12. Intel Corp. got a 10, Dell Computer Corp. and Microsoft Corp. 9 apiece. Airborne Freight Corp., American Express Co., AT&T Corp., Compaq Computer Corp., Herman Miller Inc., Schering-Plough Corp. and SunAmerica Inc. all notched an 8.

What sort of scorecard is this? It's the number of investment newsletters that recently recommended each of the above stocks, as tallied by Mark Hulbert's "Hulbert Financial Digest."

The most-recommended stocks, as a group, did slightly better than the overall stock market (as measured by the Wilshire 5000 stock index) over the years, Hulbert says.

Steps to cut your auto insurance
A quick review of your auto insurance policy can lead to hundreds of dollars in annual savings, according to Dollar for Dollar Productions Inc. in New York.

The personal finance advice company recommends looking at three money-saving options:

Increase your deductible. Increasing the amount you pay for an accident from $100 to $500 can cut your collision cost by 30 percent.

Ask about discounts. If you buy home and auto coverage from the same company, you may qualify for a break of up to 15 percent. Check discounts for insuring a second car.

Reconsider coverage. If one of your cars is getting old it may be time to drop collision coverage. The insurer will only pay up to the book value of the car, which you can look up in the National Automobile Dealers Association Official Used Car Guide.

Auto stocks in for a hard braking?
Stocks of the three major U.S. automakers have surged in recent weeks, making them one of the market's strongest sectors so far this year. But Wall Street is lukewarm toward the companies, fearing that investors might soon hit the brakes on the stocks' momentum.

Analysts are worried that a glut of new cars -- and the automakers' willingness to cut to gain market share -- will erode earnings for General Motors Corp., Ford Motor Co. and Chrysler Corp.

"We do not see, at this time, a convincing, table-pounding 'buy' argument for automaker stocks," analysts Philip Fricke and Brett Hoselton of Prudential Securities said in a recent report.

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