The Key West citizen. [volume] (Key West, Fla.) 1879-current, 1943-06-30

AP FeatI
WASHINGTON, June 3d.
Don't get too excited if the gov
eminent seems to be nicking your
pay check for a bigger Cor a
,smaller) income tax than you
would have contributed under the
old method of collection.
The pay-as-you-go plan will
result in some wage earners tenn
porarily paying more taxes than
they actually owe. A large num-
Der, for the time being, will pay
less than they owe. Uncle Sam,
however, will square up with
both groups next March.
(This is entirely separate, OF
course, from the undated Is per
cent of one years xes-1942 or
1943, whichever is lower-which
are to be paid half on March Is,
1914, and half on March Is, 1945.)
s Same Tax Rates
Tax rates on 1943 income are
the same as they were on 1912
income. The new law only changes
the method of collecting taxes.
Temporary over payments and
under payments result from eff
forts to simplify the withholding
process. WV,
One reason for this is the wage
bracket method of withholding
taxes. "a levy Of 20 per cent on
wages above $12 a week for single
persons, $24 week for married
persons (plus So for each depen-
dent is basic the withholding
rate. But employers may, if they
desire, use government tables
which specify. the withholding
amount for each wage bracket.
The idea is tot make their book
keeping easier.
For example, John Smith (mar-
ried and no children has a wage
Of $50 a week. He will contribute
the same amount, $2.20a week, as
Bill Brown, a $69-per-week man
with the same family status. In
capabilities like this will be adjust
ed in complete returns on 1913
income which taxpayers must
make as usual by next March Is.
Reductions Vary
If a wage Garner has contribut-
ed more tax than he actually owes,
the collector of revenue will then
give him refund. If he owes
more tax than has been withheld,
he will have to pay the differ
ence.
Another reason for temporary
overpayment and underpayment
is that the withholding plan
makes specific allowance for only
one deduction personal exemp-
ton based on family status A
statistical" allowance is made for
the average deduction, but wage
earners with unusually large de-
auctions may be overtaxed and
those with very small credits may
be undertaxed temporarily.
The new system is. on the COM
plicated side, but the thing to re-
member is that the withholding
levy aims at collecting from cur
rent income a sum roughly APP
proximating actual tax liability.
And liability is based on the same
tax rates and the same allow
ances for exemptions and deduc-
tions as you used in making out
your return last March.
Extra Bookkeeping For Some
Certain classes of taxpayers,
however, will have to do some ex-
ira bookkeeping this year. Single
persons receiving wages figured to
exceed $1,000 and married, persons
receiving wages Of more than 3d.
500 must estimate, their tax liabil-
ity above the Withholding amount
(plus 1913 March and June pay
merts) on September Is and pay
the excess then and on Dec. Is.
After this year, excess settlements
will be made quartaTly-on the
18th of March, June, September
and December.
Persons who receive their in
come from business, professions,
rents, dividends, ETC.. instead of
from wages and salaries, likewise
must file tax estimate Sept. Is
and pay in quarterly installments.
A wage Garner who receives
more than 500 income from
sources other than his wages, also
must estimate the withholding
amount
If a taxpayers estimate is more
than 20 per cent under his liabil-
ity, he has to pay penalty. How
ever, taxpayer who thinks he
has made an error in his Sept. Is
declaration can make an amended
estimate on. December Is.
If his amended estimate is 80
per cent correct (66 2-3 per cent
in case of farmers) he can escape
q penalty,