Recent law changes include valuable breaks for real estate brokers, sales agents and other self-employed individuals. What follows are the highlights of three tax savers.

1. Health insurance deductions for the self-employed: Starting with 2003, self-employeds get to deduct 100 percent (up from 70 percent for 2002) of their payments of medical insurance premiums for themselves and their spouses and dependents.

2. Bigger first-year expensing deduction: There are two ways they can write off their outlays for equipment purchases, such as computers and file cabinets. One is the "standard" route - recovering the cost through depreciation deductions over a period of years. Or, they can opt for the often-overlooked tactic of "expensing," under tax-code section 179, and deduct the entire cost of the equipment in the year of purchase.

Let's say your equipment purchases include $5,000 for computers and copiers. Instead of depreciating them over five years, they can be immediately expensed. A $5,000 write-off lowers taxes by $1,250 for an individual in the 25 percent bracket, plus applicable state taxes.

There's a cap on the deduction. But the previous deduction ceiling of $25,000 was quadrupled by the 2003 tax act to a whopping $100,000 for 2003, 2004 and 2005, a change introduced to allow many more businesses to qualify under section 179..

The paperwork for first-year expensing is straightforward. Complete Form 4562 (Depreciation and Amortization). Carry the Form 4562 deduction to, and enter it on, the line for "Depreciation and section 179 expense deduction" on the two-page Schedule C (Profit or Loss From Business), which is where to report receipts, along with equipment costs and other expenses, to arrive at a net profit or loss. Once that has been accomplished, Form 4562 and Schedule C are supposed to accompany Form 1040.

3. Profit from paying your kids. Do your children help out with your business Could they? A savvy way to take care of their allowances at the expense of the IRS is to pay them wages for work they do. This tactic keeps income in the family but shifts some of that income out of your higher bracket and into their lower one.

For 2003, a child sidesteps taxes on the first $4,750 of earnings (that figure is scheduled to increase in later years). For this business expense to stand up under IRS scrutiny, your children must actually render services and you must pay them reasonable wages.

Internal Revenue Code Section 3121(b)(3)(A) exempts the wages you pay your children under the age of 18 from Social Security taxes, provided you do business as (1) a sole proprietorship (IRS lingo for the lone owner of a full-time or part-time business that's not formed as a corporation or partnership) or (2) a husband-wife partnership. To put it another way: This exemption doesn't apply to a family business that's incorporated or a partnership with a partner other than a spouse.

TIP: Write-offs for equipment purchases and wages enable self-employeds to save more than just income taxes. They also reduce self-employment taxes, assessed for 2003 at a rate of 15.30 percent rate on the first $87,000 of net (receipts minus expenses) earnings and at a rate of 2.90 percent on net earnings above $87,000.