Evening capital news. (Boise, Idaho) 1901-1927, 1920-01-06
INCOME TAX FACTS
You SHOULD KNOW
STATEMENT NO. 2

Twenty thousand persons last year
paid fine Of SIS each for failure to
file an income tax return for 1918, al
though their income for that year was
not taxable. .t
The revenue act provides an exemp-
ton of $1,000 for single persons, $4,000
for married persons and heads of fam
lilies, and an additional exemption of
$500 for each person dependent upon
the taxpayer. il such person is under
1S years of age, or incapable of self
support. The delinquents last year
We're persons whose income exactly
equalled the amount of the exemptions
and who considered 1t unnecessary
therefore, to file return. and others
whose income was nontaxable because
OF dependents, and who We're under a
similar mistaken impression.
For example, a single man with n
net income of $1,000 was supporting a
sister for whom he was allowed an ex-
emption of 5000, placing his income in
the nontaxable list. For this reason
,hesdid not file a return. When his de-
linquency was discovered through a
return filed by his employer. who is
required to report payments of $1,000
or more to each employe, he was fined
IS.
MUST FILE A RETURN
To avoid penalty. every person whose
income for the last year equaled or
exceeded $1,000, or $4,000, according to
their marital status or their status as
the head of a family, must file a return.
The law makes no exceptions, the PEN
atty for failure being fine of not
more than $1,000.
HEAD OF A FAMILY
Whether or not person is the head
of a family" and entitled to $4,000
exemption is a question to be deter
mined largely by circumstances sur
rounding each individual case. The
fixing of his status decides, in many
instances, whether his income Is tax
able or nontaXable.
A head of a family is defined by
treasury regulation as "a person who
actually supports and maintains one
or more individuals who are closely
connected with him by blood relation
ship. relationship by marriage, or by
adoption, and whose right to exercise
family control and provide for these
dependents is based upon some moral
or legal obliga tion" A single person
is the head Of a family II he Is the
sole support of relatives living in the
same house with him and IL he exer-
cises control of household affairs. The
words "sole support" are used in the
sense Inat lnerG Is no Otner person 10
whom the dependents may look for
support. Income from other sources,
such as interest on bonds, stock divi-
oends, pensions, ETC., IL meagre enough
still to leave the recipient dependent
does not preclude a claim for exemp-
tion.S Such income, however, must be
included in the return Of the head of
the family.
CANNOT DIVIDE EXEMPTION
The $1,000 additional exemption al
lowed the head OF a family cannot
be divided between two single MEM
bers Of household. A division Of
responsibility excludes the parties from
such claim. A single person who does
not qualify as the head OF q family
may still claim an exemption Of 5000
for each person dependent upon him
for support. IL such person Is under Is
years of age or incapable OF self-sup-
port. A son who has left home but
who sends TO his mother more than
half the sum required for her support
is entitled to the $500 exemption. pro-
vided the mother cannot support her.
self. Otherwise the amount must be
considered as a gift, and, therefore.
Is not deductible. A son living at home
and supporting his mother may claim
the $4,000 exemption allowed the head
OF family. but not an additional ex-
emption of 5000 unless the mother 10
incapable of self-support.