Custer weekly chronicle. [volume] (Custer City, S.D.) 1890-1931, 1921-12-17
INCOME TAX LAWS
The Bureau of Internal Revenue Answers
Questions as to New Income Tax
Requirements.

The Internal Revenue Office at Aber-
deem has issued the following state
ment
To what extent will the average tax
payer be benefited by changes in rev
enue legislation? What are his exemp-
tions and deductions under the revenue
act of 1918? Hundreds Of such ques-
tions are reaching the Bureau of Inter
nal Revenue. The purpose of this
article is to answer those most frequent
y presented.
Probably the most important change
affecting the man of moderate income
is in the exemptions. Under the 1921
act married man with a net icome Of
So, 600 and less is entitled to an exemp
ton Of 81, 800 Under the revenue act
of 1918 this exemption was limited to
$4,000. The revenue act of 1921 also
provides for each person dependent up
on the taxpayer if such person is under
eighteen years of age or incapable of
self support because mentally or physi-
cally defeCtive-an exemption Of $500
The exemption under the revenue act
of 1918 was 5000 for each dependent.
Thus, married man with two depend.
ents whose net income for 1921 was
So, 900 will pay this year a tax of SOS
compared with $l04 on the same income
for 1920
The exemption of 81, 500 applies also
to the head of family whose net in
come for 1927 was S., 900 or less, an in
crease of $500 compared with the 1918
act A head of family, as defined by
present Treasury regulations, is "a per-
son who actually supports and main
tains in one household one or more
individuals who are closely connected
with him by blood relationship, rela-
tionship by marriage, or by adoption, or
whose right 70 exercise family control
and provide for these dependents is
based upon some moral or legal obliga
ton"
The normal rate of tax, per cent on
the first 81, 900 Of next income above the |
exemptions, and per cent on the re
naming net income, remains unchaug
ed. This applies to citizens and resi-
dents Of the United States. Alien non
residents are taxed to the foil per cent
on income received from sources within |
the United States. Nonresident aliens
are allowed only a single personal ex
emption of 81, 900.
Many inquiries are received relative |
to the surtax rates
Taxpayers in the preparation Of ti,elr |
returns should be careful to note that |
the surtax rates for the calendar year !!
1921 remain unchanged. The surtax |
rates on incomes for 1921 range from / |
per cent on the amount of net income |
between $1,000 and $4,000 to 90 per
cent on the amount Of net income in |
excess of 81, ,0C0, 600 For the calendar |
year 1922 and each calendar year there |
after, the surtax ranges from ! per cent |
on the amount Of net income between |
$4,000 and $4,000 to so per cent by |
ceeds 100000.
Returns are required of every single |
person whose net income for 1921 was
81 900 or over, every married person
not living with husband or wife whose
net income was 81 900 and every mar.
ried person living with husband or wife
whose net income was 81 900 or over
Every person whose gross income for
the year was $1,000 or over must make
return regardless of the amount of net
income. This requirement was not con
tanned in the revenue act of 1915 Every /!
married couple living together must
make return, either separate or joint |
as desired, if their aggregate net income |
was $4,000 or if their aggregate gross in
come was $4,000 or more.
Gross income includes practically |
every dollar the taxpayer received dur
ing the year 1921. Net income is gross
income less the exemptions and de-
ductions specifically provided for by the
act.
The period for filing returns is from
January lst to March 10th, 1922, when |
made on the calendar year basis. II |
the taxpayer makes his return on the |
fiscal year basis, the return must be filed |
on or before the fifteenth day of the |
third month following the close of the
| fiscal year.
The Commissioner of international |
Revenue may grant reasonable exten- |
sion of time for filing returns Except
in the case of taxpayers who are abroad, |
no such extension shall be for a period |
of more than six months. The return
must be filed with the collector of in
ternal revenue for the district in which
the taxpayer lives or has principal place
of business. If the taxpayer has no legal
| residence, the return must be filed with
the collector of internal revenue at Bal
timore.
This year as last, the tax may be paid
in full at the time of filing the return,
or in four quarterly installments, due on
or before March l5, June Is, September
| Is and December Is. Ifany installment
| is not paid when due, the whole amount
becomes due and payable upon notice
and demand from the collector The
penalty for failure to file a return or pay
the tax within the time prescribed is a
fine of not more than 81 900. For will