The Waterbury Democrat., 1943-06-17

mat tax" The quarterly income
tax installments paid March 10 and
June is, before withholding goes
into effect, will apply to the tax on
1913 income, he said.
Explaining that Ito pay the costs
Of victory, both taxes and Bonds
are necessary" Mr.. Morgenthau de-
clared that with the convenient
way Of paying taxes as you go, the
chances are you will even be able
TO buy more bonds than before
Under the new system of collec-
ton. taxpayers will pay most of their
taxes on their 1943 incomes in 1943.
Amounts withheld will be credited
against the tax liability reported on
the income tax return filed March
Is, 1914, or in certain cases on re-
turns filed September Is and De-
eemher Is, 1943.
Heretofore, income taxes for any
ene year have been payable in four
fnstallments during the following
year. withholding initiates a system
Of collecting income taxes on income
as It Is earned through weekly,
semi monthly, or monthly deduc-
tons from pay envelopes. 1t is the
same collection system that has been
used in connection with social Sc
curity taxes, the Victory tax and
War Bond payroll allotment plans.
Important Features
Here are some of the more impor-
tant features of the new Current
Tax Payment Act of 1913:
withholding of income is at the
rate of 20 per cent on wages over
and above withholding exemptions.
Because Of these exemptions, the
sum withheld runs all the way from
zero up to 20 per cent of wages. In
the case of the majority of wage
earners, however, withholding will
not be more than IL per cent of
gross pay. The withholding is COM
puted according to the family status
of the taxpayer-that is, whether
he Is single, married, the head of q
family, or has dependents.
The employer may arrive at the
amount to be withheld by comput-
ing 20 per cent of the employees
wages over the withholding exemp-
ton, or determine the amount by
using tables included for conven-
fence In the law. For example, if
tables are used, a man with a wife
and two children, who earns sos a
week, will have $3.50, or SO per cent,
deducted from his weekly pay.
The amounts withheld for income
and Victory tax are combined in a
single deduction from each wage
payment. If the employer uses the
exact computation method, wages
may be computed to the nearest
dollar. That is, If the employees
wage is $3.50, the employer may
treat 1t as SAG.
Exemption Varies
Every employe is allowed with
which varies with his family status.
The Withholding exemption for a
single person is at the rate OF 1924
for the year; for a married person
claiming all the personal exemption,
or the head of a family, 81 ,248; for
q married person claiming half of
the personal exemption, 1924; for a
married persons claiming none OF
the exemption, 80. When husband
and wife both work, if they so agree,
one may take all of the exemption
or they may split it equally. Pro-
portional exemptions are allowed for
separate pay periods. For example,
the weekly wage Garner who is single
will have an exemption Of $12 a
week.
the first dependent in the case of a
head OF a family, an additional
Withholding exemption at the rate
Of 1912 for the year Is allowed. For
Withholding purposes a dependent
Is "a person dependent upon and
receiving his chief support from the
employe and either under 10 years
Of age or incapable of self-support
because mentally or physically de-
fective."
These exemptions are far with
holding only and are used for de-
termining the sums to be withheld.
They differ in some degree from in
come tax exemptions. but do not
change them. In come tax exemp-
tons, for the final calculations, con-
tinue to be: For single persons.
$500; for married persons, $1,000;
for each dependent, $3.50.
With the exception OF certain spe-
Gifted groups, Withholding applies TO
every individual who receives for
~ qArsonal services wages that