The Wolf Point herald. (Wolf Point, Mont.) 1913-1940, 1921-02-24

wife to claim the exemption, which
is designed to cover essential living
expenses. This exemption may be
claimed by either or may be appor-
toned between them as they may
elect.
If the income of either husband or
wife for the year 1920 was more than
SIS, 900, each should file a separate
return. This is for the purpose of
computing correctly the surtax on in
come in excess of $4,000, which ap-
plies separately to the net income of
husband and wife, and not to the
combined net income.
The surtax rates, which apply only
to net income in excess of $4,000,
are computed without benefit of the
personal exemptions. Many taxpay-
ers make the mistake of computing
tax on the combined net income of
husband and wife, to their own dis
advantage. AS an illustration, in the
case of a husband whose net income
was $1,000 and that of his wife
$4,000, the total normal and ~surtax,
if the incomes were combined, would
amount to $3.50, whereas if computed
Ou lue llltOllC vi Ooth NOoto 6LhOoh
to only $3.50. In the first instance,
deducting the personal exemption of
$4,000 from the combined income of
$4,000, the tax is on the remaining
$1,000. At the rate of 4 per CEN on
income in excess of that amount the
normal tax amounts to $500. The
surtax, which is computed without
the benefit of the personal exemp-
ton, amounts to $50, which is 1 per
cent on the amount of income be-
tween $4,000 and $4,000, 2 per cent
on the amount of income between
$4,000 and $4,000, and 8 per cent on
amount of income between $4,000
and $4,000.
If computed separately, the hus-
band may deduct the personal exemp-
ton of $4,000 from his income of
1000 and on the remainder pay a
tax of $240, being A per cent
on the first $4,000 and s per cent on
the excess. His surtax amounts to
$50, being 1 per cent on the amount
Of his income between $4,000 and
$4,000, and 2 per cent on the amount
Of his income between $4,000 and
$1,000. The wife receives no per-
;onal exemption and her entire in
of $4,000 is taxed at the rate of
I per cent, being less than $4,000.
rhe husbands tax is $270 and the
vife's $50.
Exemptions Not for All (,
Not every married person is en-
tiled to the $4,000 exemption. The
lain is dependent upon whether
nan and wife are living together {
within the meaning of the revenue S
ct. In the absence of continuous t
esidence together, whether a man {
r woman is living with wife or hus- t
and depends upon the character of l
he separation. S
If occasionally and temporarily the S
life is away on a visit or the hus- t
and is away on business the joint t
ONE being maintained, the $4,000 I
yemption applies. Unavoidable alb E
ence of a wife or husband at a sana- a
)rium on account of illness does not b
recIude a claim for the exemption. t
:, however, the husband voluntarily Il
nd continuously makes his home at S
place and the wife at another, a
hey are not living together within
lie meaning OF the income tax laws, r
sgardless of their personal relations. \
l case of separation by mutual =
yreement each must make a return r
income of $1,000 or more. The
me rule applies in case of divorce L
legal separation. A maid or widow
1T the head of a family and without :,
,pendents is entitled only to $1,000 "
.emption.
How to Determine Status
The status of a taxpayer on the
st day of the taxable year deter re
ines the amount of his exemptions. "
on December 81, 1920, he was
and living with his wife he
ay claim the $4,000 exemption, al
ough the marriage may have taken
ace on December 80. If on Deem
r 80 he became a widower, he is en-
led only to the $1,000 allowed a
lgle person unless the head of a ce
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