Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1920-02-24
INCOME TAX FACTS
YOU SHOULD KNOW

Numerous inquiries are received by
collectors of internal revenue concerning
the income tax in its relation to the
combined net income Of husband ard
VIII" Occasionally these questions indi-
cate that there is in the mind of the
taxpayer the impression that income re-
ceived by the husband IL turned over
TO the wife may he regarded as a gift
and therefore is not taxable. Such, how
ever, is not the case. If the combined
income of husband and wife for the year
1919 equaled or exceeded $1,000, a return
must be filed on or before March 10,
1920 The combined net income OF hus-
band aud wife in excess of 5000 Is tax
able The law provides also that the
income of minor dependent children must
be included in the return OF the parent.
For example, a husbands net income
for 1919 was $1,000. His wife, employed
as a seamstress, received from such wo-k
a net income of 500 Two minor sons,
dependent upon their parents. each re-
ceived 500 as messengers The total
family income was 81. 700. from which
may he deducted the personal exemption
of S2,oOO plus 5000 for each dependent
son, leaving a taxable income OF 5000,
on which. at the normal rate OF / per
cent the tax is So.
Where the combined income Of hus-
band and wife IS 5000 or less the wife,
return may he included IN that OF her
husband. Where the combined income
exceeds 5000. sefTarate returns are re
Quired for the purpose 81 computing the
surtaN. which applies only to incomes In
excess OF that amount.
The following will serve as an illus
tratiOn OF the combined tax on husband
and wife: The net income Of a husband
for 1919 was 81 900 and that of his wife
$1,000 From the husbands income NAV
he deducted the personal exemption o.
5000. ON the first $4,000 at the normal
rate Of per cent the tax is SlGo On
the remaining $1,000. AT the normal rate
Of per cent, the tax Is $50. making the
total normal tax OF the husband $40,
In addition he pays SurtaX OF | per
cent on the amount OF his net income re
tween 5000 and $1,000. amounting to slO,
and . per cent on the amount OF bis net
Income between $4,000 and 5000,
amounting TO $50, making total normal
and surtax Of $40. The wife can rlaim
no personal exemption, and her entire
income Of $1,000 is taxed at the rate ~
per cent, being less than $1,000 The
combined income OF husband and vile
on an aggregate income ~ 50 600 Is $3.50.
The exemption Of $1,000 allowed the
head Of a family also is the subject Of
frequent inquiry. single person IL
the head of n family II be Is the sole
support Of the relatives living I'm the
same house with him. and n Re eNer-
cises control over household affairs.
In the absence of continuous residence
tcgethe the circumstances OF the sep
aratlon may determine the amount of
he exemption Whether or not he Is
the head Of a family single person. II
his net income for 1919 was 81 600 or
more. must file a return. For example.
q widOwer has a son years old whom
he is supporting in school because his
income OF 81 800 year does not per
NIT him to maintain a home. Since
he is not married, he must file a return.
but as the head of a family he is en-
titled to an exemption of $1,000 with
an additional exemption 81 5000 be-
cause of the dependent child.
Mere support of a dependent who
continuously and without necessity re-
sides elsewhere than in the home Of
the taxpayer, however, does not confer
the 50 600 exemption. though II may be
nisdc the basis OF a claim of $500 for n
dependent. For each person (other
than husband or wife, dependent upon
him for support the taxpayer Is al
lowed an exemption Of 5000. provided
such person Is under Is years Of age or
incapable of self support.
This exemption does not depend upon
family relationship nor whether the
taxpayer and dependent are members
of the same household. Thus tax
payer, unmarried and living In the city.
who supports mother incapable OF
self support and who from choice lives
in the old homestead in the country is
entitled to an exemption of $1,000. The
separation is not one Of necessity. II,
however, the mother should live under
the same roof with the son, he would be
entitled to the $1,000 exemption allowed
the head of family.
Careful study of the forms now in the
hands Of collectors anG deputy col
lectors of internal revenue for distribu-
tion among taxpayers viii aid greatly
in the fling of correct return. II.
however, the taxpayer meets with I'M
usual difficulties he may call upon the
bureaus experts, who are visiting every
county in the United States to assist
taxpayers In making out the forms
The services of these experts are offered
without cost, but failure OF the tax
payer tn see them does not relieve him
from his obligation to file his return,
accompanied by at least one-fourth Of
the amount of tax due, on or before
NFu