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She's frightened of making too much income and having to pay taxes.

If her income, excluding Social Security, is $8,550 or less in 2001, she won't have any Federal income tax due. (This assumes she is not blind and uses the standard deduction.) The next $27,050 is taxed at 15%.

You said she is receiving SSI. If it's truly Supplemental Security Income, it is tax-free. If she's receiving standard Social Security benefits, they are tax-free unless 1/2 of her SS plus her other income exceeds $25,000. If so, some of her SS benefit will be taxed. (There's a worksheet on the back of the SS 1099.)

You can get the 2001 tax rate schedules on the 2001 Form 1040-ES, available from the IRS website.

Phil Marti
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