The Cordova daily times., 1921-02-03
REPAIRING OF INCOME TAX IS
 PROPOSITION

married persons applies to the con- | blned income of husband and wife, to
 which must be added the income of dependent minor children A con- mon error is for both husband and wife to claim the exemption, which is designed to cover essential living eX-
 penses. This exemption may be claimed by either or may be appor-
 tioned between them as they may elect
 Ii the income of either husband or wife for the year 1920 was more than $5,000, each should file a separate re- turn. This is for the purpose of con- putting correctly the surtax on income in excess of $5,000, which applies separately to the net income of hus- band and wife, and not to the com bined net income.
 The surtaX rates, which apply only to net income in excess of $5,O00, are computed without benefit of the per sonal exemptions. Many taxpayers make the mistake of computing tax on the combined net income of husband and wife, to their own disadvantage. AS an illustration, in the case of a | husband whose net income was $7,0OO | and that of his wife $2,000, the total | normal and surtax, if the incomes were combined would amount, to $48O, | whereas if computed on the income of | each would amount to only $35O. In the first instance, deducting the per sonal exemption of $2,000 from the | the combined income of $9,00O, the | tax is on the remaining $7,0O0. At the rate of 4 per cent on the first | $4,O0O and 8 per cent on income in ex- cess of that amount the normal tax amounts to $400. The surtax, which | is computed without the benefit of one place and the wife at another, $8O, which is 1 per cent on the amount | of income between $5,O0O and S6O00, | 2 per cent on the amount of income | between $6,OO0 and $8,OOO, and per cent on the amount of income be- | tween $8,OOO and $9,OOO.
 If computed separately, the husband ! may deduct the personal exemption of | $2,000 from his income of $700O and | on the remainder pay a normal tax of $240, being 4 per cent on the first $4,000 and 8 per cent on the excess. His surtaX amounts to $30 being | per cent on the amount of his income between $5,000 and $6,000, and 3 per i cent on the amount of his income be. tween $6,000 and $7000. The wife receives no personal exemption, and her entire income of $2,O0O is taxed at the rate of per cent, being less than $4,000. The husbands tax of $270 and the wifes $80. Not every married man is entitled to the $2,000 exemption. The claim is dependent upon whether man and wife are living together within the meaning of the revenue act. In the absence of continuous residence to. |gether, whether a man or woman is living with wife or husband depends upon the character of the separation
 If occasionally and temporarily the wife Is away on visit or the hus- band is away on business, the joint home being maintained, the $2,00o ex- emption applies. Unavoidable ab- sence of wife or husband at a sana- | torium on account of illness does not preclude claim for the exemption 1 If, however, the husband voluntarily 1 and continuously makes his home at one place an dthe wife at another, they are not living together within the meaning of the income tax laws regardless of their personal relations
 In case of separation by mutual agree 1 ment each must make return of in- come of $1,000 or more. The same rule applies in case of divorce or legal separation. A maid or widow not the head of family and without depend ents is entitled only to a $1,OO0 exemp- tion.
 The status of taxpayer on the last day of the taxable year determines the amount of the exemption. If on December 31, 1920, he was married "rd living with his wife he may claim the $2,O00 exemption, although the marriage may have taken place on De- cember 30 If on December 30 he became widower, he Is entitled only to the $1000 allowed a single person unless the head of family.