Detroit evening times. (Detroit, Mich) 1921-1958, 1942-12-25
How Victory Tax
Puts 5Pct.. Nick
In 1912 Salaries

WASHINGTON, Dec. Is (INS).
While you're in the holiday
mood this Is to remind you that
the new victory tax. to be de-
Quoted from the weekly pay
check, will become effective New
Years Day.
Questions and answers on the
new tax have been prepared by
Representative Reed (R) Of New
York. and issued by the House.
They follow:
Q-What Is the so-called VIC
tory tax?
Alt IL . new type Of indi-
vidual income tax which h Inn
posed In addition to the regular
income tax.
Q-What is the rate Of tax?
Alive per cent Of the In
como In excess Of 3l2 per week,
or $624 annually.
POSTWAR CREDIT
Q-Does the 1924 exemption
apply to both married and single
persons
Ayes: allowance for the
married stctus II provided under
the postwAs credit which II al
lowed. the amount being larger
for married persons than for
single persons.
Q-Does the s per cent rate
apply to the entire income il IL is
greater than 1924 per annum?
A-No: only 70 the amount In
excess Of $6zl.
BUSINESS DEDUCTIONS
Q-Is allowance made for IN
ferest- payments charitable de-
auctions. etc. as in the case under
the regular income tax?
A-Not In the case Of wages
and salaries. These deductions
are allowed II incurred In carry.
ing on . trade or business- An In
dividual who n In business also
can deduct other business ex-
penses. including the cost 81
goods sold. In other words, the
tax applies to the gross Income
In case Of wages and salaries,
and 10 tho net income u the
individuals TRADE or business.
CREDIT UP TO 40 PER CENT
Q-What Is the postwar credit
which is allowed in connecticut
with the victory tax?
A-Slngle persons are allowed
q credit Of Is per cent Of the
amount Of their victory tax, and
married persons credit Of -
per cent, plus 2 per cent for each
dependent. In no case. however,
can the credit exceed $500 In the
case Of . single person, 81 80 In
the case Of . married pesSon, or
500 for each dependent.
TAXPAYERS OPTION
Q--Does q person have to wait
until after war to get POSTWAR
credit? -
A-No; u may Be used cur.
rently, ut the option Of the tax
payer, ~ . deduction for life In
surance premiums paid. for
amounts paid on outstanding In
debtedness or for amounts In
vested In war bonds.
For example, II . married per.
sons victory tax amounted to
500, he could reduce his habil-
ity by 20 per cent, or $40, II he
had paid out that much or moro
during the year for life insurance
premiums, mortgage payments
or war bond purchases.
Thus his net victory tax nsbil-
lty would Be go. However, n
he choSe, or II he had made no
such payments during the year.
he would pay the full amount Of
the victory tax. and thereby he
como entitled to receive, after
the cessation Of hostiIities, q
postwar credit Of $40 for tho
year. II only part Of the victory
tax credit n used currently, the
balance IL rofundable after the
war.
HOW IT's PAYABLE
Q--How Is the postwar credit
payable?
Alt will Be allowed 90 IN
Offset against any taxes duo
from the taxpayer after the ces-
sation Of hostilities. Any bal
anco will b refunded to the tar.
payer Immediately.
Q-Does the taxpayer have tol
file a separate return in connecticut
with the victory tax?
A-No; Il will be computed on
the regular income tax return.
Q-How is the victory tax paid +? |
Alt n deducted automati-
cally from your salary BY your
employer, under . Withholding
provision.
u,;Ie korvoo.