Twin city review. [volume] (Champaign, Ill.) 19??-1929, 1926-03-05

Your income tax for the year 1928
is less, in proportion To your income
than was the tax fof 1924. A rate
reduction, however, is not the only
benefit afforded by the revenue act Of
1926. Increase in the exemptions and
other changes in revenue legislation
are of immediate interest to every
taxpayer.
The revenue act of 1926 requires
| that returns be filed by every single
person whose net Income for 1929 was
| 81 800 or more, on whose gross in
come was $4,000 or more, and by
every married couple whose aggregate
net income wos SO 800 or more, on
whose aggregate gross income was
$4,000 or more. las, year returns
were required OF married couples
whose aggregate net income was
| So, 500 or more, and of single persons
| whose net income was 81 900 or more
Husbands and wife, living together
may include the income of each in a
| single Joint return, or each may file
| a separate return showing the income
of each. Net income is gross income
less certain specified deductions for
4 DuNiifNE tA HfiiEtsf iNNAsNrf bt'h 'hhfs'i
/ contributions. etc.
| The period for filing returns ends
| March 10, 1926. The return, accom-
panied by at least one-fourth of the
amount of tax due, must be filed with
the collector of internal revenue fof
the district in which the taxpayer has
his legal residence or has his pflnci-
pal place of business.
The exemptions under the revenue
act of 1926 are $500 for single per
sons, and 50, 500 for married persons
living together and heads of familieE
In addition a $500 credit is allowed
for each person depending upon and
receiving his chief support from the
taxpayer, if such person is under is
years of age or incapable Of sell sup
port because mentally or physically
defective.
Tn enormal tax rate under the rev
enue act of 1926 is ~ per cent on
the first $4,000 Of net income In eX-
cess of the personal exemptions, credit
for dependents, etc, per cent on the
next $4,000 and > per cent on the bal
anee. Under the preceding act the
normal tax rate was per cent on the
first $4,000 of net income above the
exemptions and credits; per cent on
the next $4,000 and 6 per cent on the
remaining net income.
All net income up to $4,000 is con
sidered earned net income on
this amount the taxpayer is entitled
10 a credit OF % per cent Of the
amount of the tax.
For example, a taxpayer unmarried
and with no dependents, whose net
income for 1925 was $1,000 would pay
without this reduction tax Of S52.jU
His actual tax IS S39.37 From his
net income of $1,000, he is allowed a
personal exemption Of 81 800; the tax
Of ~ per cent on the remaining
g.. 500 is S52 50. One-fOurih OF this
amount or SI3.13, may be deducted.
For the purpose of computing this
credit, in no case is the earned net
income considered To be in excess Of
$4,000. Under the revenue act OF
1924 the earned net income was con
sidered not 10 be in excess of $l0,OOO.
The term earned net income Isl
defined as wages, salaries, profess
sional fees and other amounts received
for personal services actually ren-
dered.'
If you are single and support inI
your home one or more persons
closely related TO you and over whom
you exercise family control, you are
the head OF family and entitled I'M
der the revenue act Of 1926 TO the
same personal exemption allowed al
married person, $500. In addition,
a taxpayer is entitled to a credit Of
800 for each person dependent upon
him for chief support, If such person
is either under Is years Of age or
incapable Of self-support because men
tally or physically defective. Such
do endent need not be a member Of
the taxpayers household. For exam
pie. an unmarried son who supports in
his home an aged mother is entitled
to an exemption Of $500 plus the
500 credit for a dependent, a total
Of $1,000. If from choice the mother
lived in another city, the son, although
her chief support, would be entitled
only to the 81, 500 exemption, plus the
$500 credit. The mother not living
with him, he is not considered the