Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1921-01-12
The INCOME TAX
Facts You Should Know for
Making 1921 RepOrt

respondence last year between the
Bureau OF Internal Revenue and per-
sons claiming an exemption of $1,000
as head OF a family. Circumstances
surrounding each individual case de-
termine largely whether person is
entitled to such exemption The fix
ing of his status decides, in many in
stances, whether his income Is tax
able or non-taxable. In either event.
IL his net income for 1920 was $1,000 or
more If single. and $4,000 or more if
married, he must file a return.
A head of a family is, defined by
Treasury regulations as "a person who
actually supports and maintains in
one household one or more individuals
who nre closely connected with him
by blood relationship, relationship BY
marriage or by adoption, or whose
right to exercise family control and
provide for these dependents is tased
upon some moral or legal obligation"
A married person living with husband
or wife, in addition to the $4,000 ex-
emption allowed such persons, can not
claim $4,000 exemption as the head
of family. irres pective of the ques-
ton of the support of others Of the
household.
SINGLE PERSONS
A single person-the term includin 6
widows, widowers, and persons not
living with wife or hubsand-is the
head Of family if he is the sole sup
port of one or more relatives living
in the same house with him and if he
exercises control of household affairs.
The $1,000 additional exemption al
lowed a single person as the head of
family can not be divided between
two members Of a household a divi-
sion Of responsibility for Control of
household affairs" excludes both par
ties from the claim Whether q per-
son who does not continuously live in
the same hoase with dependent rela-
tives IS entitled to the $4,000 exemp-
ton depends upon the character of the
separation. If parent is absent on
business part of the year, or a child or
other dependent away at school or on a
visit, the common home being main
tanned. the exemption applies.
If a l'arent is compelled to maintain
his dependent children with relatives
or in boarding house. the exemption
may still apply. If, however, the de-
pendent continuously and without
necessity makes his home elsewhere
than with his benefactor, the latter is
not the head of family. irrespective OF
the question of support.
A taxpayer may not be the head of
family and still be allowed an ex-
cmption of 5000 for each person de-
pendent upon him for chief support If
such person is under Is years Of age
or incapable of self-support because
mentally or physically defective. The
words physically defective" refer not
only to cripples, but to persons dcfcc-
tive because of old age or i'll health.
Neither residence. relationship. nor
legal dependency are factors in deter
mining the right of the taxpayer t.
such exemption. To establish his
claim, the taxpayer must have con-
tributod during the year more than
one-haif of the sum needed for thu de-
pendents support.
ALLOWABLE EXEMPTIONS
The following are concrete cX-
amples Of circumstances which govern
the exemptions allowed the head of a
family and for dependents.
A son who has left home sends his
mother more than half the sum re-
quired for her support. He is allowed
an exemption of 5000. unless the
mother is able to support herself in
which case the contribution is regard
ed as q gift.
A son living at home supports ar in
valid mother in the same household.
He is allowed a deduction OF $4,000 as
the head Of family, plus an addi-
tional 500 for his dependent, who is
physically incapacitated. Gt should
be noted that the 5000 additional ex-
cmption for dependents does not APP
ply to husband or wife, even though
either che has become total burden
upon the other)
A single man lives with and sup
ports mother so years Of age and
two sisters - and u years OF age. all
in good health. His exemption is
$4,000 as the head of family. Since
his mother and sisters are neither
under IS years of age nor mentally or
physically incapacitated, he can not
claim An additional exemption for de-
pendants.
A whoever is the entire support OF
a child under IS years Of age, but
otherwise neglects it. His exemption
is $1201. He is not the head or a
family and is entitled only to the 5000
for a dependent.