The Carbon County news. [volume] (Red Lodge, Mont.) 1924-1931, 1929-02-21

Surtax on net income in excess
of $4,000
Thousands of inquiries have reach
ed the Bureau OF Internal Revenue
relative to changes in tax legislation.
The purpose of the bureau is to ans
wer these questions in series of
newspaper statements, based on the
revenue act of 1928, approved May
90, 1928.
The rates of income tax and sur
tax applicable to individual income,
and the personal exemption of indi-
viduals and credits for dependents,
remain unchanged. The normal tax
rate is u per cent on the first
$4,000 in excess of personal exemp-
tion, credits for dependents, ETC.,
per cent on the next $4,000, and 5 per
cent ON the balance. The surtax
rates apply to net income in excess
of $4,000. The maximum rate is 20
per cent, which applies to net in
come in excess Of 100000.
The rate of tax on the income of
corporations is reduced from 1874 per
cent to IL per cent. The same rate
applies to the income Of insurance
companies, reduction with respect to
this class of taxpayers being from
12h per cent to IL per cent. The
credit allowed a domestic corporation
the net income OF which is $4,000 or
less, is increased from $4,000 to So
| 600.
Income tax returns are required Of
every single person whose net income
for the taxable year 1928 was S1,50O
or more; every married person, living
with husband or wife, whose net in
come was $4,000 or more, and every
person, single or married. whose gross
income was $4,000 OF more, regard
less Of net income.
Husband and wife living together
must include the. income Of each in
single joint return, or each must
file separate return showing the
income Of each. In the return of mar
ried persons must be included also
the income Of dependent minor chill
dren.
Forms for filing returns of individ-
ual income have been sent to taxpay-
ers by collectors Of internal revenue.
Failure to receive form, however,
does not relieve the taxpayer of his
obligation to file return and pay
tax within the period prescribed
on or before March 15 1929, if the
return is filed on calendar year
basis.
Persons whose net income for 1923
was derived chiefly from salary or
wages and was not in excess of $4,000
should make their income-tax returns
on Form 1040A.
Persons whose net income was de-
rived from a professional or business
including farming, or from the sale
OF property or rent, although the
amount was less than $4,000, are re-
quired to use the larger Form 1040.
The use of Form 1040 is required
also in the case where the net income
was in excess of $4,000, regardless of
whether from salary, business, pro
fession, or other taxable sources.
"A taxpayer, though unmarried, who
supports in his home one or more
relatives over whom he exercises con-
troll, is the head of family and is
entitled to the same exemptions al
lowed a married person, S3,50O. Also.
he may claim $500 for each person
dependent upon him for chief sup
port If such person is under 18 years
OF age or incapable of self-support
because mentally or physically defec-
tive. Such dependent need not be
relative of the taxpayer nor mem
Der of his household. The term
mentally or physically defective"
includes not only cripples and those
mentally defective, but persons in i'll
health and the aged For example.
II an unmarried son supports in his
home an aged mother, he is entitled
to an exemption of $500, plus the
S400 credit for dependent, a total
of $4,000. If, from choice, the mo-
'her lives IN another city, the son.
although her chief support, would be
to only the S1,5o0 exemption.
plus the S400 credit. The mother not
wing with him, he is not considered
he head of family. The s4OO
redit does not apply to the wife or
husband of a taxpayer, although one
must be totally dependent upon the
ther.