Evening star., 1914-01-31
income TAX laws
TERMS EXPLAINED
To Whom Words ''WithhoIding
Agent Applies and What
His Duties Are.
TERM ':SOURCE" DEFINED;
REALTY AGENTS EXCLUDED
Required to Make Returns With All
Certificates Filed to Internal
Revenue Agent.

]. Question. \ married man. living
with his family. has an income OF $500
and his wife similar income, all derived
from interest on mortgages. Does either
make a return and pay taxes?
Yes. They both can make individual
returns provided they are attached to-
gether. or the husband can make the re-
turn, including in his. his Wife's income.
He should inclose in parentheses in the
different subdivisions the amount of the
wife's income. Both are liable to the
tax. They are Individually and Jointly
liable.
=, Question \ married man. living
with his family, has an income OF S4,3p
and his wife an income of $1,000, all de-
rived from interest on mortgages. How
much tax is paid, and by whom"
difference between the joint incomes
fS..Aan. and the amount of exemption
allowed c'::;;::'.;;'';;'), or on (S2,i666u. or a
tax of tS24,67l. They are jointly and
individually liable for the tax.
:. Question. \ man has an income of
So0,0oo per year all received as divi-
dends on stock in corporations subject to
the income tax. Does he pay any tax on
his income?
Yes He does not pay any normal tax,
but 5000" of the S5o,0o is subject to the
super or additional tax. That is, he will
have to pay ! per cent on the S30,0W.
What Source" Refers To.
The first thing to be found out is what
does the word source refer to, and who
are those persons referred to in the law
as debtors" or Withholding agents. The
word source, which is referred to many
times in the law, refers to the place
where the income originates. Take, for
example, coupons. The source is the
corporation where the coupons are paid.
or the bank or trust company as the case
might be. the name of which is Inserted
in the coupons as the person or institution
which will pay them.
Who are the debtors or Withholding
agents? They are all persons, firms, etc,
as mentioned in paragraph ( of the law,
namely, copartnerships. companies, cor
socatons insurance companies; in what
ever capacity acting, including lessees,
mortgagors of real or personal property,
trustees acting in any trust capacity,
executors, administrators, agents re-
cevers, conservators, employers and all
officers and employees of the United
States having the control, receipt, GUS
tody, disposal or payment of interest Eek
cept income derived from il crest upon
bonds and mortgage or deeds of trust, or
other similar obligations of corporation
upon which the normal tax of l per cent
has otherwise been withheld at the
source as provided for by the regula-
tions). rents. salaries wages. royalties,
taxable annuities twhere the annuity is
not in the form of interest income). emol-
uments or other fixed and determinable
gains, profits and income of another per-
son, exceeding $1,000 $1,000 the year
1879 for any taxable year and except
where it is provided that it shall be eN-
empt. by some Treasury decision.
Real estate agents are not included in
this classification, and are not consid-
cred Withholding agents. therefore they
are not required, and should not take
out any tax from rents collected by
them. The person paying the rent is
the withholding agent and should de-
duct the tax when it is required.