(MONEY Magazine) – After a long drought, Congress is raining down tax breaks on Americans. According to CCH Inc., an Illinois publisher of tax materials, more than 650 tax changes were tucked into the minimum-wage, health insurance portability and welfare reform bills that became law in the final days of the 104th Congress. Most of them will take effect with the New Year. And many of them will put money in your pocket--if you know how to use them. To help you do that, I've pulled together the eight most significant tax breaks the new laws offer individuals:

--Expanded Individual Retirement Accounts. In the past, couples with a stay-at-home spouse could contribute a maximum of $2,250 annually to a tax-deductible IRA. The new tax law, however, lets one-earner couples contribute up to $4,000 a year--that is, as much as $2,000 per person. If you or your spouse is covered by a pension plan at work, though, the full $4,000 contribution is deductible only if your combined adjusted gross income (AGI) is $40,000 or less. A phased-out IRA deduction is permitted for AGIs between $40,000 and $50,000. Once your AGI hits $50,000, any IRA contribution you make is nondeductible, but the earnings still grow tax deferred. By the way, even though this tax change takes effect Jan. 1, 1997 and you can make 1996 IRA contributions until the date you file your taxes, you won't be allowed to grab this tax break on your '96 return.

My advice: If you can spare the cash and will qualify for this deduction, stash the whole $4,000 in a 1997 IRA. The improved spousal account can save you a bundle of tax dollars--as much as $490 if you'll be in the 28% bracket (taxable income of $41,201 to $99,600 next year) and $693 if you find yourself in the top 39.6% bracket (taxable income of $271,051 or higher).

--Penalty-free IRA withdrawals. One drawback of an IRA has been that if you needed to get your mitts on the money before age 59 1/2, you'd owe a stiff 10% early-withdrawal penalty. But starting next year, you can escape that penalty for certain types of withdrawals. For instance, you'll be able to pull money out of your IRA penalty-free to pay out-of-pocket medical expenses, provided they exceed 7.5% of your adjusted gross income. Uncle Sam will also let you tap your IRA to pay for medical insurance as long as you've been out of work for 12 consecutive weeks and received unemployment compensation. The money must be taken out in the year you get the unemployment compensation or the year after, and no more than 60 days after you find a new job.

--Looser retirement plan distribution rules. After 1996, you'll no longer have to begin taking distributions from your company's retirement plan at age 70 1/2 if you're still working, unless you own more than 5% of the company. So if you're about to enter your eighth decade and don't urgently need your pension cash, it's probably a good idea to let the money sit in the company plan tax deferred until you're in a lower tax bracket.

--An adoption tax credit. Starting in 1997, people with legitimate adoption expenses will be able to claim a new tax credit of up to $5,000 per adopted child, and as much as $6,000 if the child is otherwise unlikely to be adopted because of physical, emotional or mental handicaps or other special needs. The tax credit begins phasing out for people with adjusted gross incomes topping $75,000 and disappears if your income is $115,000 or more. If your tax bill is so low that the amount of your credit would be more than the taxes you owe, you can carry forward the unused portion of the credit for up to five years.

Adoption expenses that will qualify for the credit include attorneys' fees, court costs, certain expenses for a birth mother's prenatal care and other costs that are directly related to a legal adoption. Even home construction and renovation costs will be eligible if a state agency requires you to add on to your house to adopt a child. Expenses that won't qualify for the credit include costs related to surrogate parent arrangements or adopting your spouse's child. The IRS has been silent on the matter of foreign adoptions; if you plan one, ask your tax adviser.

--Deductible long-term-care premiums. Worried about winding up in a nursing home someday and facing a staggering $40,000 or more a year in costs? After Dec. 31, you may be able to buy a little peace of mind with help from the government, thanks to the new health reform tax law. Within limits, your premium costs for long-term-care insurance will be deductible as a medical expense. (Bear in mind, however, that the total of all your health-care expenses must still exceed 7.5% of your adjusted gross income to get any medical write-off.) Note: If you're being nursed by a relative who is not a licensed health-care professional, you don't get to take the deduction.

To be eligible for this new deduction, the long-term-care expenses must be for the maintenance or personal care of the chronically ill, following a plan prescribed by a doctor. Limits on the amount of premiums you can deduct are based on your age: $200 a year if you are age 40 or less, $375 for ages 41 to 50, $750 for ages 51 to 60, $2,000 for ages 61 to 70, and $2,500 over age 70. Those write-offs may not fully match your actual premium costs. For instance, long-term-care premiums that pay for $100 a day of nursing-home care and $50 a day for in-home care cost about $809 a year if you take out a policy with inflation protection at age 50 and $1,950 a year at age 65, according to the Health Insurance Association of America. Finally, your benefits will be tax-free: If your policy pays a fixed amount per day, as much as $175 a day will be tax-free (indexed for inflation after 1997); if the policy reimburses you for your exact expenses, the whole benefit is tax-free.

--Larger health insurance deductions for the self-employed. If you're self-employed, your deduction for medical and dental insurance premiums for yourself, your spouse and your dependents will rise on Jan. 1 to 40% of your premium, up from 30%. Also, if you were self-employed for at least part of the year, you will now be able to claim the new write-off for long-term-care insurance described above, provided you're not eligible for coverage under your spouse's health insurance plan. Tip: Because you get the deduction in the year you pay the long-term-care premium, try to put off shelling out the cost of upcoming premiums until 1997, and you'll win some modest tax savings.