Arizona republican., 1921-03-13

cent on that amount instead of 4 per cent on the combined net income of husband and wife. If such income, however, was over S4000 then it would be advantageous to make a division be- tween husband and wife and a separ- ate return thereof because the-normal tax of per cent is applicable to any balance of net income in excess of s4000. But it is in those cases where the net income is sufficiently large to be subject to the imposition of the sur tax rates that a husband and wife may considerably lessen the amount of the tax to be paid by division of the in come and separate return In such cases the taxpayers would make a mis- take in computing the tax on the com. bined income of husband and wife to their own disadvantage As an ilus- tration, in the case of husband and wife whose net community income was $10,000 for the calendar year 1920. The total normal and surtaX. if the incomes were combined would amount to s750, whereas if computed on the income of each would amount to only S4S0- In the first instance at the rate of per cent on the first 4000 and per cent on the amount in excess of s4000 to-wit S6000, the normal tax amounts to $640. The surtax, which is l per cent on the amount of income between S5,000 and S6,000, per cent on the amount of in come between s6,000 and $S,000 and 3 per cent on the amount of between $S,000 and s10,000 amounts to s110-
 If such a community income is di vided between husband and wife and computed separately that is to say s5O00 each, the wife would pay 4 per cent on S400O, and per cent on 5000, amounting in all to S240. The husband also would pay per cent on $4000 and 8 per cent on 5000, making his total payment also s240. But in this case the surtax rates would not be applic- able to the income of either the wife or husband because neither of such in- comes would be in excess of $5000. So it will be seen in the case stated that where the income of the husband and wife is computed separately a saving of $27O is made which latter amount would have to be paid In case the tax was computed on the combined net in- come of the husband and wife.
 It is important that taxpayers be informed too, that in all cases if the income of either husband or wife for the year 1920 was more than 5000 each should file separate return. This is for the purpose of computing correctly the surtax income in excess of S500O, which applies separately to the net income of husband and wife, and not to the combined net income.
 Income taxpayers must take notice that next Tuesday, the 18th day of March, is the last day for filing re- turns under the law. After that date those who are delinquent in filing their returns will be subject to the penalties provided by statute in such cases, which automatically attach and become part of the tax. It is not very pleasant for the collector of internal revenue to have to collect penalties, however carelessly they have been incurred and 1t is cer- tainly not pleasant for the taxpayer | to have penalties to pay in addition to the tax burden already upon him. So 1 it is hoped that every taxpayer will be diligent to avoid delinquency in this | duty to the government.
 | Many delinquent cases arise because
 of misunderstanding of exemptions
 A great many persons last year were assessed nominal penalties of from s5
 to $10 for failure to file an income tax return for 1919, although their income l for that year~was not taxable. The
 revenue act provides a personal ex-