Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1918-02-05


at your post office or bank, or by
sending to Hon. Seth W. Jones. Col
lector of Internal Revenue. Portsmouth,
y. H.
Your return must be in the hands Of
that official on or before March /,
1918.
We shall BREEZY summarize the more
important requirements as contained
! in these blanks, and also point out
| what seems to us to be defect in
Blank 1910 A. coupled with suggestions
which may possibly save some in
dividual tax payer trouble or annoy
ance.
Who Must Make Returns?
If you are a citizen or resident of the
United States and your net income for
1917 equaled or exceeded $4,000, If
you are married and live with your
wife Cor husband), or $1,000, if you are
! not married or do not live with your
wife Cor husband). you must make a
return.
If your net income plus the net in
come of your wife Cor husband) and
dependent children Gf any amounted
to s., 900 or more, all such income must
! be reported, either on one form or ON
separate forms.
Income of dependent children must
be included in their fathers or mothers
return unless such income was derived
from a separate estate under control of
a guardian, trustee. or other ncuciary.
Income of q minor or incompetent de-
rived from a separate estate, must be
reported by his legal representative.
Although to citizens and residents
dividends on stock are not subject TO
the normal tax. (but are subject TO
surtax when total net income exceeds
$4,000. you must include them for the
purpose Of determining whether YOU
are liable TO make a return. Further
more. SO far as the liability to make
return is concerned. YOU are not al
lowed to take into consideration your
personal exemption. For instance.
single man is entitled 10 a personal
exemption OF $1,000. If he has a net
income of $1,000 he must make return
Notwithstanding the fact that his re-
turn viii chow no tax to be due.
Income Exempt from Tax.
The following kinds OF income need
not be reported on your return:
ca Proceeds of life-insurance poll
cies paid to individual honeticiaries
upon the death Of the insured.
Oh The amount received by the in
Suved as i return of premium or
premiums paid by him under life in
surance. endowment, or annuity con-
tracts. either during the term or at the
maturity of the term mentioned in the
contract, or upon the surrender of the
contract.
(c) The value of property acquired
by gift. Request, devise. or descent Out
the income from such property shall be
! included as income).
Id Interest upon the obligations Of
State or any political subdivision
thereof
(o) Interest upon the obligations of
the United States, except. in the case
Of such obligations issued since Sep
tcnber l. 1917, upon the amount by
which an individuals holdings exceed
$4,000 par value.
81 Interest upon obligations OF the
possessions of the United States.
CD Interest upon securities issued
under the provisions of the Federal
Farm Loan Act of July II, 1916.
(h) The compensation Of I'LL officers
and employees of Il state, or any politi-
cal sub division thereof, except when
such compensation is pa,d by the
United States Government.
When to Use Form 1O40 A.
Form 1040 \ is intended for the
smaller incomes. The blank directs
YOU to use this form even ii your total
income exceeds $4,000 provided that II
does not exceed Your personal cxemp-
tion (see below by more than $1,000.
and provided also that it does not ex-
coed $4,000"
For instance. a married man with
five dependent children under Is is en-
titled to an exemption of $4,000. If his net
income does not exceed $4,000 he may
| use form 1910 \. because it does not
exceed his personal exemption by more
than $4,000. If he had four dependent
children his personal exemption would
be $500. and if his net income ex-
ceeded $4,000 he would have to use the
larger form. 1910. If he mad no chill
dren his personal exemption would he
$1,000. and he could not use form l040
\ if his net income exceeded $4,000
The reason for the $4,000 limitation
i in the use Of blank 1910 y is because
that blank is adapted to incomes which
are subject TO the normal tax only with
personal exemptions as hereafter stat
cd, while the surtaX Gas to which there
is no eXemption) commences at
amounts exceeding $4,000.
Personal Exemption.
II YOU are married and live with
your wife Tor husband) or are head of
a family. you are entitled 10 {, personal
exemption of $1,000 plus 500 tor each
dependent child under Is Cor mentally
or physically incapacitated for self
support. If husband and wife make
separate returns. this exemption may
be claimed by either (but not by both)
or may he divided between them
If you are not married or do not live
with wife Cor husband) or are not head
of a family. YOU are entitled 70 q per-
sonul exemption of $1,000 only
\ head OF family" is a person who
in accordance with some moral or legal
obligation, actually supports and main
tains one or more individuals closely
related to him or her by blood. mar
riaee or adoption.