If she used the car solely for business, the annual deduction would be $8,854.67, considerably more than the annual depreciation cap for purchases.

So, in the example above, if the taxpayer claimed the entire $2,000 annual deduction, he must pay tax on the total amount claimed after May 6, 1997.

Also, a cap on annual deductions for mortgage interest, reductions in Medicare, Social Security, defense, veterans and farm programs.

Under the tax laws, annual deductions for expenses up to $15,000 are allowed for any company eliminating architectural barriers to access by the handicapped.

Andersen essentially expects partners to make their own retirement plans, while Price Waterhouse makes an annual deduction from their earnings for generous retirement benefits.

Under this system, the capitalized cost (basis) of tangible property is recovered over a specified life by annual deductions for depreciation.

The new law limits the annual deductions to the original value.

To have the proper amount withheld, many people will need to reduce the number of withholding allowances claimed, partly because the the annual deduction for each allowance increases to $1,900, from $1,080.

In 1980, when the top tax rate was 70 percent and mortgage interest rates were at 12.7 percent, the annual deduction was worth up to 8.9 percent of a loan.

The Internal Revenue Service defines depreciation as an annual deduction available to taxpayers to recover the cost of business or investment property with a useful life of more than one year.