The Chapel Hill weekly., 1932-11-04

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under such policy"
The instructions" issued by the
state for filing out income tax returns
inform the taxpayer that the follow
ing items are not deductible: the ex-
penses of the operation of an automo-
bile used by the taxpayer in going to
and from work or pleasure, and mon
ey spent for educational expenses.
Explanation of Exemptions
Federal: The exemption of $1,000
is for single person" The exemp-
ton of S2,5OG is for ''the head Of a
family, or married person living
with husband or wife" A husband
and wife living together shall receive
but one personal exemption, and it
shall be S2,500. If husband and wife
make separate returns, the personal
exemption may be taken by either or &.
divided between them. A credit of
s4O0 is allowed "for each person 10Th
er than husband or wife) depending
upon and receiving his chief support
from the taxpayer if such dependent.
person is under Is years of age or is
incapable of self-support because men,
tally or physically defective"
State: The exemption Of $1,000 is
for "single individual" The exemp
ton of $4,000 is for married man
with wife living with him, or for a
person maintaining a home and sup
porting therein one or more dependent,
relatives, or for widow or widower
having minor child or children natural
or adopted An additional exemption
is allowed for each individual (other
than husband or wife) dependent up
on and receiving his or her chief sup
port from the taxpayer if such depend
ent is under 18 years of age or is in
capable Of self-support because men
tally or physically defective. An exs
emption Of 81 900 is allowed to a mar
ried woman living with husband and
having a separate and Independent in
come.
The Surtax
The federal government lays nof-
nal tax Of a per cent on the first
$4,000 Of taxable income and per
cent on all in excess Of $4,000. In
addition, it leves a surtax. This sur
tax applies to incomes in excess OF
$4,000. The rate begins at l per cent
and graduates up to SIS per cent
The surtax is levied on net income,
without personal exemption and with,
out deduction for dividends or for in
terest on United States bonds.
Example: A married man with two
children and a net income of $4,000
has a personal exemption Of $3,309.
Assuming that there are no deduc-
tions except for personal exemption,
he has a taxable income (for normal
taxi Of 81 TOO Hence his normal tax
is 1916. His surtax is l per cent OF
$4,000, or 500; total federal tax, 1926.
If his net income is $4,000, his
normal tax is 1916 and his surtax $40;
total federal tax, $416. Net income,
$4,000: normal tax, $776; surtax,
$3.50; total federal tax, 1856. Net
income, $4,000: normal tax, $1,17G;
surtax, $440; total federal tax, Sl,6l6.
Net income, $4,000: normal tx,
s2,776; surtax, $4,000; total federal
tax, $5,736.
And 50 on up. Upon an income or
81 900 900 assuming no exemption)
the total federal tax is $571 300. For
incomes above 100000 the surtax
rate is 55 per cent.
Important Notice
This article explains the most
important provisions Of the fed
eral and state income tax laws
as they apply to the majority of
taxpayers, and shows the
amount of the federal tax and
the state tax over a considerable
range Of incomes.
The information given here is
adequate to cover the simpler
cases. but Of course there are
many cases, Of complicated
character, which this informa-
ton does not cover. Income tax
returns, both federal and state,
for the year 1882, must be turn
ed in by March Is, 1888. Before
that date, representatives of The
United States Collector of In
ternal Revenue and the State
Commissioner of Revenue visit
the cities and towns of the state
in order to assist citizens in max
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