Arizona republican., 1922-02-01
Income Tax Facts
You Should Know
Series Of Fifteen Articles Prepared
by the Bureau of Internal y
Revenue of Informative
Value to Millions.
No. 2


Forms for making returns Of in
come for the year 1921 have been re-
vised and simplified, and contain in
structions which is carefully followed
will be of material aid to taxpayers
In the avoidance of errors.
Many of these errors are due to
misunderstanding of the exemption
allowed q head of a family, defined
by treasury regulations as a person
who actually supports and maintains
In one household one or more indi-
viduals who are closely connected
with him by blood relationship, re-
lationship by marriage or by adop-
ton, or whose right to exercise fam
lily control and provide for these de-
pendents is based upon some moral
or legal obligation"
The exemptions allowed a head of
family under the revenue act of
1921 are the same as granted a mar
ried person--$2500 where the net in
come for 1921 was $4,000 or less and
$4,000 where, the net income exceeded
$4,000. Circumstances surrounding
each individual case determine large
ly whether a person is entitled to
such exemption.
A single person--the term including
living with wife or husbands the
head of a family If he is the sole sup
port OF one or more relatives living In
the same house with him, and IL he
exercises control of household affairs.
A married person living with hus-
band or wife, in addition to the eX-
emptions allowed such persons, can
not claim an exemption as the head
of a family, irrespective of the sup
port of others in the household.
Exemptions Not For All
Whether a person who does not
continuously live in the same house
with dependent relatives is entitled
to the exemptions. depends upon the
character of the separation. If a
parent is away on business part or
the year or a child or other depen-
dent is away on a visit, the common
home being maintained, the exemp~
tions may be claimed. II q parent
is compelled to maintain his depen-
dent children with relatives, or in a
boarding house, the exemption may
still apply. If, however the depen-
dent continuously and without neces-
sity makes his home elsewhere than
with his benefactor, the latter Is not
the head Of family. irrespective OF
the question of support.
A taxpayer who is not the head OF
a family may still be allowed the eX-
emption OF S400 for each person de-
pendent upon him for chief support
! if such person is under Is years Of
age or incapable OF self-support be-
cause mentally or physically defec-
| tive.
Tax Examples
Following are concrete examples o.
| taxes due under the revenue act oi
/ 1921 and circumstances governing ex-
| cmptions allowed a head OF a family
| and for dependents:
A married couple living together
| with two children, 10 and IL years
| old, had a net income for 1921 o
s45OO. Their tax is $4S, which is
per cent on $1,000, the amount Q
| their net income less the exemption
| of s250O for married persons who's
net income was less than $4,000, plu
| $500 for each dependent The tax o.
the same income for the year 1872
| was $S4.
A married couple living togethe
| with two children, 10 and IL year
| old. had a net income for 1921 Q
| $4,000. Their normal tax is $l2e
| which Is 4 per cent on $4,000. tn
amount of their net income less tn
exemption of $4,000 allowed married
persons whose net income was ~ eX
cess of $4,000, plus $500 for each &c
| pendent. On the same income 10
1920 the normal tax was S144.
A single person living at home an
supporting an invalid mother an'
sister II years old had net IN
come for 1921 OF $4,000. His tax is v
He Is allowed the $2500individual eX
emption granted the head Of fam
| lly whose net income was less thar
$4,000, plus S400 for each dependent
ut should be noted that the $400 ad
ditional exemption for depenoeinsl
aoes not apply to husband or wife
even though either one has becom
| \ total burden upon the other) Z
single man lives with and support
a mother so years old and two SIS
ters, 19 and 21 years old. he Is az
lowed an exemption as head OF
family (s2500 or $4,000 depending
mon whether his net income wa