- Do my witholdings need to be within 90% of my tax burden for salaried income? As it stands now, I will owe a significant amount (more than 50% of my total tax liability) at then end of 2002.

There are several "safe harbors" from the estimated tax penalty. It sounds like your 2002 withholding alone will not get you within 90% of your 2002 liability or within $1,000 of it. Your best bet may be to base your 2002 prepayments on your 2001 tax. You'll find details about this in IRS Publication 505.

- (Follow up) If they don't need to be within 90%, what's the best place to put money set aside for taxes? Treasury issues? A CD? I won't need it until April of 2003.

Put it somewhere that you are sure it will still be there when you need it. I remember one Fool who had his tax money in LU when the bottom fell out of it.

- How does student loan interest deduction work? Is it interest paid that year, or accrued that year? or is there a difference?

Sorry, I know there are a lot of changes for 2002, and I'm not up on them yet. Try IRS Publication 970.

- What kinds of relocation allowances are deductable?

None. Some of your relocation expenses may be deductible, and some reimbursements may be tax-exempt. See Publication 521.

- Are Roth IRA distributions of the principal (original money invested) really tax and penalty free, no matter what?

Yes, assuming we're talking about contributions. See Publication 590.

Phil Marti