(FORTUNE Magazine) – So. You just got the final tally from your tax adviser, and as you settle back with this magazine in one hand, you may be clutching a stiff Scotch in the other. You couldn't write off what? You had to produce how many pages of documents, most of which you spent hours scrambling to find? And in the end, you owe--well, never mind how much, but it's a heap more than last year, right?

Maybe you thought that by now you had absorbed the pain of President Clinton's 1993 tax act. Sorry. Many of its provisions didn't kick in until last year and are showing up on your tax return this spring for the first time. A bunch of even newer IRS regulations, quietly instituted in 1994, sting further. And new, computer-driven IRS auditing procedures, some still bug-ridden, are landing hard. Bottom line: The well-to-do are being nickel-and-dimed into a state of high dudgeon. "So many of my clients are angry that their taxes have gone up so much, and they want to know why," laments Sharon Kreider, a former IRS auditor who is now a CPA in Santa Clara, California. "But there's no one single change I can point to. The affluent are getting hit with a whole lot of little things all at once." For sure. The better off you are, the more likely you are to feel as if you're being buzzed by a swarm of yellow jackets.

The pain begins, of course, with the 36% top tax rate, up from 31%, on individuals who earn more than $115,000 and couples whose income tops $140,000 (ouch!). Earnings above $250,000 get stung with a 39.6% rate (aieee!). Add the payment of Medicare tax on all your income, not just the first $135,000 (yeeow!). This change has received little media attention because most working stiffs don't feel it, but to the high-paid executive, that 1.45% bite goes deep, since it is calculated on total earned income, including such plums as bonuses and exercised options. Disney CEO Michael Eisner saw his 1994 Medicare tax take flight in a way that would put Dumbo to shame: He got nearly $11 million, including salary, bonus, and restricted stock. This translates as Medicare tax of about $160,000--quite a difference from the previous maximum of $1,957.

Other major changes have been adopted but haven't yet struck. People who hire others to help with their small children will have to cope with the new way the IRS will go after the "nanny tax," the Social Security taxes employers are meant to pay on behalf of any household help. In theory, the change affects not the amount of tax owed but the way it must be reported. Previously, as would-be attorney general Zo‘ Baird learned to her dismay, payroll taxes were supposed to be filed quarterly on a bewildering document known as Form 942. Beginning with the 1995 tax year, those taxes, totaling 15.3% of the income of any domestic worker earning more than $1,000 during the year, will appear as a designated new line on the employer's regular income tax form.

The certain result: Many parents will be paying the tax for the first time ever. Tax advisers around the country say that whereas those old quarterlies were easy to ignore, no reputable tax person, faced with that empty line, is going to sign off on your income tax return unless your nanny tax is up to date. "They've really put tax professionals in the role of enforcers on this thing," says Kreider. "There's just no way around it anymore." That may make some parents rethink whether they still want a full-time, at-home helper or should switch to some less costly, and less convenient, kind of day care.

Here's a rueful bit of synchronicity: As organizations get flatter, Congress and the Treasury are taking a lot of the fun out of scaling what peaks remain. If you earn over $150,000, you have to worry more about supplementing your qualified pension plan, since the law now requires that your employer's contributions to the fund may not be based on compensation above that amount. The pre-1993 ceiling, $236,000, was far comfier.

Sure, you can and should expect your company to offer you some sort of deferred-compensation deal to make up the difference, but don't expect much generosity, since what employers chip in to such schemes is not a tax write-off for them. It may be no day at the beach for you, either: Deferred-compensation participants are in effect general creditors of the corporation. If your company goes belly-up before you retire, you could lose every dime.

To make sure your nest egg is safe in a merger, acquisition, or other future cataclysm, by the way, it's a good idea to ask a tax attorney or a CPA to look over the terms of your plan. He or she may suggest that you insist on a rabbi trust--so named because it was invented some years ago to protect a rabbi's retirement money--which shields your funds from any misfortune other than an outright bankruptcy.

If you decide to discuss all these slings and arrows with your adviser over a round of golf, you may find more open spaces to do so than in the past: The links are less crowded these days because club dues are no longer tax-deductible, and lots of people just aren't re-upping. A recent Coopers & Lybrand survey of perks at 254 U.S. companies showed that about one-third expect to limit the number of memberships they'll hand out to executives and the amount they'll spend for each one. How you fare depends partly on your choice of industry. The survey found that retailers may be the champs of open-air schmoozing--none plan to limit executive club memberships. Only 20% of communications companies are mulling cutbacks, while nearly 40% of consumer products manufacturers are clamping down.

In Washington, our elected representatives drone on about the merits of replacing the current well-nigh incomprehensible tangle of income-tax rules with a flat tax. This is commonly understood to be a uniform, lower rate for all taxpayers (House Republican majority leader Dick Armey of Texas favors 17%), with hardly any deductions for anybody. For the well-off, tax rates were already flatter than Nebraska. But then new alternative minimum tax (AMT) rates came along as part of Clinton's tax act. Originally intended to keep rich people from whittling their tax liability to zero through the use of clever combinations of write-offs, the AMT still does that. But instead of the pre-1993 flat rate of 24%, it's now 26% on the first $175,000 of income and 28% on everything over that. To know for sure whether you ought to be paying the AMT instead of straight income tax (no surprise, you must pay the higher of the two), consult a tax professional, who will then run your personal numbers through a computer program. Most software programs designed for home computers also have a feature that will calculate your AMT for you.

If that 28% top AMT rate caught your eye, it's for good reason: It's the same as the capital gains rate. This means that those hardest hammered by the new AMT are big investors, especially those who live in places like New York City, where state and local taxes are at levels the rest of the country can barely credit. But then, this is a place where some people calmly pay $1,000 a month to park a car, so go figure.

Here's how it works. In figuring your federal income tax, you normally deduct promptly paid state and local taxes from your income. But in calculating the AMT, those taxes are among the many deductions that must be added back to your taxable income; you then apply the appropriate AMT rate to the resulting total. Suppose that in 1994 your only income was $1 million in capital gains from investments, and your only deductions were $300,000 in state and local income and property taxes. Your taxable income was thus $700,000. Applying the capital gains rate of 28% yields a tax bill of $196,000. But that's not how AMT sees it. It figures your taxable income to be the entire $1 million, and presto: You now owe $280,000, or an extra $84,000. Says Manhattan CPA Arthur Levy, who has several clients lucky enough to be so burdened: "This AMT is onerous. It becomes enormous. It's a killer."

Aha, you may be thinking, I am but a small investor, humbly tending my little account at a local brokerage firm. I am therefore off the hook. Not so fast. The IRS, slowly but inexorably hauling its computer systems into the late 20th century, can now tap directly into your broker's computer system and keep almost instantaneous track of every investment transaction you make. Trouble is, the IRS computers don't always understand what they're looking at. The magnetic tape that links your broker to Big Brother tends to make everything look like a stock sale. Thus, if you write a check against your account to buy a car, if you shift money from a taxable bond fund to a muni bond fund, if you fiddle with your own dough in any innocent and nontaxable way, you could get a big tax assessment that will cost you lots of time and legal fees to straighten out.

This kind of muddle is what happened to a client of Cheryl Frank, a Washington, D.C., tax attorney. The fellow had $55,000 in a brokerage account, moving it around a lot from one fund to another as stocks went up and down last year. He actually ended with a net loss. Even so, because his every fiscal twitch was recorded as a taxable sale, the IRS decided he owes more than $200,000. Frank is now hard at work trying to convince the tax folk that this figure is preposterous, but appeals of this sort can take months or even years. When your broker sends you a gazillion-page Form 1099 at the end of the year, do not glance at it and recycle, regardless of how many trees this might save. Give it to your tax adviser. Then pray.

In the new order of things, entrepreneurs fare even worse than investors. Want to run a business out of your home? Be aware that your home office won't be tax-deductible unless it meets stringent new standards. Expenses for travel to and from work sites away from home--construction sites if you are a roofer, operating rooms if you are a surgeon--are probably not deductible, either, thanks to IRS rules issued last July. In fact, if you are self-employed and do a great deal of traveling, the IRS may decide you don't really have a home at all, and therefore nothing you do, wherever you go, is deductible, ever. Absurd as this sounds, it happens. Two of Cheryl Frank's clients have landed in this pickle. Says she: "I have to believe that since this keeps coming up, it must now be in the auditors' manual." Changes in the rules that apply to everyone have a way of slamming small-business owners especially hard. Those golf club dues are a perfect example. For a corporate executive they're a pleasant but usually nonessential perk. Same with meals and entertainment, now only 50% deductible, down from 80%. But to a fledgling business owner, these things keep the wheels turning and the clients coming back, and they just got a whole lot more costly. You can no longer deduct a spouse's travel on a business trip unless the spouse is a bona fide employee. In a one-person business, that extra pair of hands--at trade shows, for instance--is a legitimate business expense, but it's no longer a write-off.

The new no-upper-limit Medicare tax adds another brick to the load. All employers match the 1.45% their employees pay, for a total tax of 2.9%; but corporations get to write off their half. The self-employed pay the whole 2.9% freight with no deduction. They also get no break on health insurance premiums. Congress let a 25% health-insurance tax deduction expire on the last day of 1993, and it has yet to be reinstated. Tip: The deduction may well be reinstated soon. So apply for an extension on your tax return, which will spare you from having to file an amended version if the deduction is reinstated retroactively, as many expect.

Before jumping the corporate mother ship to start your own enterprise, you may also want to bear in mind a little-known fact: If you own a business, the IRS has a perfect right to decide that you are paying yourself too much money. Joseph Lane, a former IRS chief of collections in Honolulu, is now a tax adviser in Menlo Park, California. At the moment he is representing four partners who own a successful business. They pay themselves more than $300,000 a year each. The IRS, using its authority to decide what is and is not "excessive compensation," wants them to declare some of that money as dividends, not salary. This would mean Uncle Sam would get seconds: The money could be taxed twice, once as it comes into the company as earnings and again when the individuals collect it.

Lane is fighting this, basing his arguments on case law stipulating that if you made very little or no money in the early years of your business (as most people indeed do), you are entitled to make it up to yourself later on. "What's weird about this 'excessive compensation' issue," says Lane, "is that there's no formula in the law for determining what is 'excessive.' It's a subjective judgment call. And the person making it is an IRS agent making $19,500 who can't even imagine earning $400,000, so you get this element of vindictiveness in there." Some CPAs report that female entrepreneurs are more likely than male counterparts to have their incomes deemed excessive. A client of Sharon Kreider's in Santa Clara was a woman business owner who earned $500,000 a year. Recalls Kreider, wonderment in her voice: "She got audited, and the auditor actually asked me, 'How can a woman make this much money?' "

Still got that entrepreneurial fever? Good for you--but just one more caution: Last summer Congress earmarked $405 million as a kind of bread-upon-the-waters way of collecting more taxes. Some of that cash will fund about 420,000 more individual audits this year than last, which would push the number audited to nearly two million, the most since 1988. The goal is to make cheating taxpayers cough up their share of the so-called tax gap--the $127 billion difference between what people have paid and what the government estimates they really owe. The General Accounting Office says the biggest component of the tax gap is the estimated $63 billion in unreported income that self-employed people and small businesses now rake in. So guess who's most likely to find an audit notice in the mailbox someday soon?

These won't be ordinary audits, either. For the past few months the IRS has been training agents in a technique called "economic reality" auditing. Again thanks to its handy-dandy new computer programs, the IRS is beginning to match up what you report on your tax return with all kinds of other information about you, including your zip code. If your address is in Sea Island, Georgia, zip code 31561, the IRS computer may know that the average household income there is $241,469, the average household wealth is $630,103, some 58% of residents have a college degree, and the average house is worth $500,000. These figures are courtesy of Claritas, a market research firm in Arlington, Virginia; the IRS will not reveal which zip codes it is zeroing in on, only that your zip code had better jibe with your income. So there you are in Sea Island, blithely reporting that you made $10,000 last year. The computer will spit out your return, marked "Here's another one!" or the cybernetic equivalent, and an auditor may have a few pointed questions for you. Of course, if you are a student or a butler and you really did make only $10,000, you'll still have to prove it.

Zip codes are only a part of the nervous-making array of electronic databases the IRS will be using to give your return its reality check. In their new training courses, auditors learn how to look at your whole economic history and your current standard of living and ask, How much income does this person probably really have? Notes Joseph Lane: "They're no longer just auditing tax returns. They're auditing taxpayers."

In the struggle to keep the federal deficit from ballooning, legislators will have few alternatives to continued leaning on the affluent. Even some Republicans who hated the 1993 tax act may hesitate to undo much of it. Paraphrasing bank robber Willie Sutton, Clint Stretch, head of tax legislative affairs at Deloitte & Touche in Washington, D.C., points out, "The upper middle class and the rich are, quite simply, where the money is. It's useless to think their tax situation is going to ease anytime soon, if ever."