The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1914-01-31
INCOME TAX
LAW PUZZLING
m EH EMR WA EYE EH II U
o OF INQUIRIES AT COLLECT
ORs OFFICE AT MINNEAPOLIS
BRINGS EXPLANATORY STATE.
NEUTRALITY-SUSPICIOUS. TO BE FILED
MARCH 1.

minneapolis Journal: AS the time
approaches for final filings under the
FEDERAL income tax law, the office Of
henry F. Dams, deputy revenue COL
rector for the Minnesota district. has
pegun to assume activity. For the last
Two or three days the office has been
pesleged by telephone. The general
public got an impression that papers
mad to be filed by Jan. 20. This rule
applied only to persons with large in
comes held at the source of the income.
N al other cases statements are to be
MED by March j,
Many taxpayers have an idea that in
NOT claiming exemption against a part
peen withheld, he is losing some of the
exemptions to which he Is entitled.
rms is not the way it works, according
70 collector Dams. The general deduc-
tlon, interest or mortgages, and mat
ters or that sort, are in the end sub
,racted from his entire gross income,
leaving the net income, from which, as
500, or, if married, S3,s33.33. is sub
tracted. This leaves the taxable in
come, on which the tax is levied, he ex-
planned.
Deductions still Possible.
Either the deductions or the specific
exemption, therefore, may be claimed
against any part Of his income. whether
withheld at the source or not. 1t is only
In cases where the taxpayer wants to
apply some part or all of these deduc-
lions n exemption to the particular
part OF his income on which the tax
has been withheld hat there is any me-
cessity for making the claim thirty
days before March l. They can equal
or his income on which the tax has not
been withheld at the ource .
The law for collection at the source
did not take effect last year until Nov.
y rTfH &1o 80 NR<I ~
terest no withholding was required un-
Less the salary, rent, and items Of that
kind amounted to $4,000 or more FOR
the two months of November n De-
alone. Taking salaries as an
example. nothing was required to be
unless the salary amounted to
$4,000 for the two months, equivalent
TO an annual salary, of $4,000. Moth
salaries of the great mass of employees
n the same principle and the same
result obtained in the case of landlords
II others, except bondholders.
Exemplihed I'm Salaries.
The tax is to be paid this year IN
salaries for the ten months of 1918,
beginning with March l, and if a man
has an income of $4,000 a year, no tax
been withheld on the $4,000 re-
ceived between March l and Nov. /.
He can, therefore, set off the deduc-
tons and exemptions against this $12,-
900 just as well as he could against the
$4,000 on which the tax was withheld.
With an income of this size 1t Is hardly
possible that these deductions and eX-
emptions would be greater than would
March 1 n Nov. J.: and
therefore, nave to be applied as
well to offset the tax withheld on the
two months income.
Only in a case where the amount
withheld was greater than the tax for
he was actually liable for the
entire ten months would it have been
necessary to make a claim by Jan. 80
In order to get back the ! per cent
withheld.
The situation Is quite similar in the
case OF the l per cent withheld FROM
bondholder in paying his coupons
all corporations have agreed to pay the
on this interest in the holders
stead, so that while it has been with
held from individuals who did not
ticu1ar part of their incomes, the hold
ers were reimbursed by the corpora
and received 100 per cent of their
interest. The interest from United
under the income tax law, SO
nothing was withheld in paying
interest on them.
Suggestion for B~ondholders.
Except. in the very few cases In
which the bonds of a corporation con-
no agreement TO a the tax In
the holders stead, the chief effect OF
rushing in now with a. claim for ex-
emptton in cases where it was not
at the time of collecting the
coupons would be to relieve the COR
of the obligation to pay, the
1t would also work to the detri-
of the bondholder, because if he
the corporation to this extent
would at the same time cut down
the aggregate amount Of the exemp-
that he would be entitled to ap-
ply to other income, which nobody had
agreed to pay for him..
furthermore, the b~ondhoIder Is obli-
after all deductions, is subject o the
the interest on bonds that he re-
,eived in the eight months from March
to Nov. 1, and, as in the case OF SAL
aries, his deductions and exemptions
not be likely to offset his whole
income, including that on which
the tax had been withheld.