January 15, 1997

Happy New Year!

          The following tax rates and amounts are effective for 1997:
             1) OASDI rate remains at 6.2% but wage base rises to $65,400 from
                 $62,700
             2) Medicare rate remains at 1.45% and there is no wage limit.
             3) The maximum retirement earnings one can earn before social security
                 benefits will start to be withheld is $11,520 up from $11,280 for those
                 ages 65 through 69 and 8,280 up from $8,160 for those under age 65.
                 There is no lid for 70 and older. Medicare Part B premium is
                  scheduled to rise to $43.80 per month from $42.50. This is still lower
                 than the $46.10 for 1995.
             4) Personal exemptions rise to $2,650 from $2,550 and exemptions will
                 begin to phase out at $181,850 of AGI for couples instead of
                 $176,950 for `95. For singles, $121,200 up from $117,950.
             5) Standard deductions will increase to $6,900 for marrieds in `97, up
                 from $6,700. For children age 14 who must file returns at least $650.
                 Can be as high as $4,150 if they have earned income, up from $4,000
                 in `96. The amount of investment income they can have before such
                 income is taxed as if their parents received it, will be $1,300, the same
                as 1996.
             6) Income tax rates for Ô97 are the same as 1996, 15%, 28%, 31%,
                 36%, 39.6%.
             7) Federal unemployment Tax Rate (FUTA) remains at 6.2%.
             8) IRS interest rate on refunds remains at 8% and 9% on taxes owed .
             9) Alternative Minimum Tax rate remains at 26% on first $175,000 of
                 income and 28% over that. More people will pay this since    
                 brackets and exemptions are not indexed and there are fewer
                 deductions allowed.
           10) Back up withholding rate remains at 31%
           11) 401(k) pay in limitation remains at $9,500. 
           12) 403(b) contribution limit remains at $9,500. Will not rise until 401(k)  
                 contributions reach $10,000.
           13) Maximum level of pay on which pay ins to plans can be based upon
                 rises to $160,000 from $150,000 with the maximum pay in for profit
                 sharing plans ging up to $24,000, an increase of $1,500 for plans
                  putting in the maximum 15%. No change to maximum money purchase
                 plan pay in of $39,000
           14) Business meal and entertainment deductibility remains at 50%. Standard
                 business mileage allowance remains at 31¢ per mile.
           15) Self employeds can deduct 40% of medical insurance premiums as an
                 adjustment to arrive at adjusted gross income, up from 30% in 1996.
           16) Minimum hourly wages are $5.05 in New Jersey and $4.75 for New
                 York and Federal purposes. 1
           17) New York State Disability Insurance employee percentage is .5% of
                 wages but not more than 60¢ per week.
           18) New Jersey State Unemployment Insurance employee percentage is
                1.025% on a maximum basis of $133 up from $128. Percentage is
                 divided .5 Healthcare Subsidies, .5 State Disability Insurance and .025
                 Workforce development.

Hybrid Stockbrokers

           The stock market is soaring and investors are awash in a sea of financial information. Magazines, telephone hotlines and the Internet have given them access to more data on this bull market than any that has come before.

          So who needs to pay big bucks for stock tips? A growing number of investors have concluded they don`t, and that has led to the rise of discount stock brokers.

          Discount brokers vary widely in the level of services they offer and the commissions they charge, but they hold one thing in common. Unlike their full-service brethren, discount brokers are not permitted to recommend individual stocks and they charge for most services heretofore received for free.

          Full service brokers from giants like Merrill Lynch and Prudential Securities to the local storefront brokerage conduct research that help them guess at which stocks are most likely to improve in price. They recommend those stocks to their customers, who pay higher commission fees for any transactions they make.

          Today there is a middle ground called a hybrid brokerage, that is a discounter which provides a variety of services such as recommending a stock when a customer requests it. We offer a hybrid brokerage service through CFS Brokerage Corp. with services such as discounted rates, interest bearing money market checking accounts, IRAs, SEPs, Keoghs, asset backed credit cards, and no charge to hold your securities. If you are interested in more information, please talk with me.

Insurance Coverage

          We urge you to take the time to have an annual review of your medical insurance coverage in view of recent increases with a view to raising your deductible or switching companies. We also urge you to consider the use of umbrella insurance coverage to reduce your automobile and homeowner`s cost of insurance. Review these policies to eliminate redundancies.

          We urge you to consider disability insurance coverage.

          We also suggest you look at the insurance benefits offered by the American Express Corporate Card, specifically business overhead insurance.

          As always, if you have any questions about these or any other matters, do not hesitate to call me.